On the Fiscal Strategies of Escaping Poverty-Environment Traps (and) Towards Sustainable Growth

Nguyen Than Dao and Ottmar Edenhofer

No 4865, CESifo Working Paper Series from CESifo

Abstract: An economy with clean and dirty intermediate inputs may fall into a trap characterized by low environmental quality and low life expectancy, while the others converge to opposite steady states. We propose new strategies towards sustainable growth. They include: (i) taxes (subsidies) imposed on the production of intermediate inputs to improve environmental quality, and therefore, life expectancy and capital accumulation, in order to guarantee that an economy locked in a poverty-environment trap can escape the stagnation; (ii) taxes (subsidies) imposed on the production of intermediate inputs, consumption, and capital income in order to decentralize the transition to the social optimum.

Keywords: overlapping generations economy; poverty-environment trap; intermediate sectors; final good sectors; fiscal policy (search for similar items in EconPapers)
JEL-codes: D62 E22 H21 H23 K32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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