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The interaction between natural resources- and physical capital-intensive sectors in a behavioral model of economic growth

Angelo Antoci, Paolo Russu (), Serena Sordi () and Elisa Ticci ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: In this paper we examine the role played by environmental externalities in shaping the dynamics of a small open economy with two sectors (a farming sector and an industrial one), free inter-sectoral labor mobility and heterogeneous agents (workers/farmers and industrial entrepreneurs). We find that the stability properties of the equilibria and their features in terms of environmental preservation, welfare outcomes and sectoral allocation of labor are sensitive to the relative level of carrying capacity with respect to the rate of environmental pressure of the economic activities. We show that an endogenous process of industrialization associated to a reduction in farmers/workers’ welfare can emerge

Keywords: Environmental negative externalities; welfare reducing industrialization; economic growth with heterogeneous agents (search for similar items in EconPapers)
JEL-codes: D62 O11 O13 O15 O41 Q20 (search for similar items in EconPapers)
Date: 2012-11
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