Nash Equilibrium Dynamics of Environmental and Human Capital

Masatoshi Yoshida

International Tax and Public Finance, 1998, vol. 5, issue 3, 357-377

Abstract: This paper explores the Nash equilibrium dynamics of environmental and human capital in an overlapping generations model. Environmental capital is degraded by consumption but can be improved by the voluntary provision of environmental goods. Human capital is formed by a child's learning effort together with his parent's human capital and environmental capital. We show that the laissez faire economy will be either stagnant, growing, or collapsing in the long-run, depending on the returns to scale of the learning technology with respect to the two kinds of capital, the initial state of the economy, and the relative price of the environmental and consumption goods. We also examine the role of the consumption tax policy of both the short-lived and long-lived government for correcting environmental externalities. Copyright Kluwer Academic Publishers 1998

Keywords: Human capital; environmental externalities; consumption taxes (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (7)

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DOI: 10.1023/A:1008690328658

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