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The Cost of Pollution on Longevity, Welfare and Economic Stability

Author

Listed:
  • Natacha Raffin

    (Université Paris Ouest Nanterre la Défense EconomiX)

  • Thomas Seegmuller

    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM & EHESS)

Abstract

This paper presents an overlapping generations model where pollution, private and public healths are all determinants of longevity. Public expenditure, financed through labour taxation, provide both public health and abatement. We study the complementarity between the three components of longevity on welfare and economic stability. At the steady state, we show that an appropriate fiscal policy may enhance welfare. However, when pollution is heavily harmful for longevity, the economy might experience aggregate instability or endogenous cycles. Nonetheless, a fiscal policy, which raises the share of public spending devoted to health, may display stabilizing virtues and rule out cycles. This allows us to recommend the design of the public policy that may comply with the dynamic and welfare objectives.

Suggested Citation

  • Natacha Raffin & Thomas Seegmuller, 2014. "The Cost of Pollution on Longevity, Welfare and Economic Stability," AMSE Working Papers 1433, Aix-Marseille School of Economics, France, revised 16 Jul 2014.
    • Handle: RePEc:aim:wpaimx:1433
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    References listed on IDEAS

    as
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    Cited by:

    1. Johanna Etner & Natacha Raffin & Thomas Seegmuller, 2016. ""The Falling Sperm Counts Story": A Limit to Growth?," AMSE Working Papers 1625, Aix-Marseille School of Economics, France, revised 04 Jul 2016.
    2. Armel Ngami & Thomas Seegmuller, 2021. "Pollution and growth: The role of pension in the efficiency of health and environmental policies," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(4), pages 390-415, December.
    3. Boucekkine, Raouf & Seegmuller, Thomas & Venditti, Alain, 2021. "Advances in growth and macroeconomic dynamics: In memory of Carine Nourry," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 1-6.
    4. Sichao Wei & David Aadland, 2021. "Pollution permits, green taxes, and the environmental poverty trap," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 1032-1052, May.
    5. Zhao Zhang & Caoyuan Ma & Aiping Wang, 2023. "Environmental Governance, Public Health Expenditure, and Economic Growth: Analysis in an OLG Model," IJERPH, MDPI, vol. 20(4), pages 1-21, February.
    6. Dugan, Anna & Prskawetz, Alexia & Raffin, Natacha, 2022. "The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey," ECON WPS - Working Papers in Economic Theory and Policy 01/2022, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    7. Varvarigos, Dimitrios, 2023. "Cultural persistence in corruption, economic growth, and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).

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    More about this item

    Keywords

    longevity; Pollution; welfare; complex dynamics;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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