Inequality, growth, and environmental quality tradeoffs in a model with human capital accumulation

Marta Aloi and Frederic Tournemaine

Canadian Journal of Economics, 2013, vol. 46, issue 3, 1123-1155

Abstract: This paper develops a simple endogenous growth model where pollution exposure and vulnerability are unequally spread across the population, and growth and distribution are endogenous. In this setup, we investigate whether tradeoffs between growth, distributional, and environmental concerns may emerge. We show that a tighter environmental policy reduces income inequality and can improve both growth and total welfare. Immediate welfare losses, though, do occur, and are larger for countries that start at low levels of environmental quality (e.g. developing countries).

JEL-codes: O41 Q28 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (15)

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