Inequality,growth, and environmental quality trade‐offs in a model with human capital accumulation |
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Authors: | Marta Aloi Frederic Tournemaine |
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Institution: | 1. School of Economics, University of Nottingham;2. School of Economics, University of the Thai Chamber of Commerce |
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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 set‐up, we investigate whether trade‐offs 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). |
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Keywords: | O41 Q28 |
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