Preferences and pollution cycles
David Desmarchelier () and
Lionel Ragot ()
No 2015-36, EconomiX Working Papers from University of Paris Nanterre, EconomiX
We consider a competitive Ramsey economy where a pollution externality affects both consumption demand and labor supply, and we assume the stock of pollution to be persistent over time. Surprisingly, when pollution jointly increases the consumption demand (compensation effect) and lowers the labor supply (leisure effect ), multiple equilibria arise near the steady state (local indeterminacy) through a Hopf bifurcation (limit cycle). This result challenges the standard view of pollution as a fow to obtain local indeterminacy, and depends on the leisure effect which renders the pollution accumulation process more volatile.
Keywords: pollution; endogenous labor supply; limit cycle; Ramsey model. (search for similar items in EconPapers)
JEL-codes: E32 O44 (search for similar items in EconPapers)
Pages: 29 pages
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Preferences and pollution cycles (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2015-36
Access Statistics for this paper
More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ().