The Cost of Pollution on Longevity, Welfare and Economic Stability

Natacha Raffin and Thomas Seegmuller

No 1433, AMSE Working Papers from Aix-Marseille School of Economics, France

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.

Keywords: longevity; Pollution; welfare; complex dynamics (search for similar items in EconPapers)
JEL-codes: C62 J10 O40 Q56 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014-07-16, Revised 2014-07-16
New Economics Papers: this item is included in nep-age, nep-dge, nep-ene and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The Cost of Pollution on Longevity, Welfare and Economic Stability (2017)
Working Paper: The Cost of Pollution on Longevity, Welfare and Economic Stability (2017)
Working Paper: The cost of pollution on longevity, welfare and economic stability (2014)
Working Paper: The cost of pollution on longevity, welfare and economic stability (2014)
Working Paper: The Cost of Pollution on Longevity, Welfare and Economic Stability (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1433

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