Wealth Heterogeneity and Escape from the Poverty-Environment Trap

28 Pages Posted: 11 Dec 2007

See all articles by Masako Ikefuji

Masako Ikefuji

University of Tsukuba

Ryo Horii

Osaka University - Institute of Social and Economic Research

Multiple version iconThere are 2 versions of this paper

Abstract

A mutual link between poverty and environmental degradation is examined in an overlapping generations model. Environmental quality affects labor productivity and wealth dynamics, whereas wealth distribution determines the degree to which agents rely on technology that has a large environmental load, and therefore the evolution of environmental quality. This interaction creates a poverty-environment trap, where a deteriorated environment lowers income, which, in turn, accelerates environmental degradation. We show that greater wealth heterogeneity is the key to escaping from the poverty-environment trap, although it can have negative effects on both the environment and output when not in the trap.

Suggested Citation

Ikefuji, Masako and Horii, Ryo, Wealth Heterogeneity and Escape from the Poverty-Environment Trap. Journal of Public Economic Theory, Vol. 9, No. 6, pp. 1041-1068, December 2007. Available at SSRN: https://ssrn.com/abstract=1067141 or http://dx.doi.org/10.1111/j.1467-9779.2007.00344.x

Masako Ikefuji (Contact Author)

University of Tsukuba ( email )

Tsukuba University , Ibaraki Ken
Tsukuba, Ibaraki 305-8573, Ibaraki 3050006
Japan

Ryo Horii

Osaka University - Institute of Social and Economic Research ( email )

1-1 Yamadaoka
Suita, Osaka 565-0871
Japan
+81 6 6879 8552 (Phone)
+81 6 6879 8583 (Fax)

HOME PAGE: http://econ.jpn.org/horii/

Register to save articles to
your library

Register

Paper statistics

Downloads
19
Abstract Views
504
PlumX Metrics