Natural cycles and pollution

Abstract

In this paper, we study a competitive Ramsey model where a pollution externality, coming from production, impairs a renewable resource which a¤ects the consumption demand. A proportional tax, levied on the production level, is introduced to …nance public depollution expenditures. In the long run, two steady states may coexist, the one with a low resource level, the other with a high level. Interestingly, a higher green tax rate lowers the resource level of the low steady state, giving rise to a Green Paradox (Sinn, 2008). Moreover, the green tax may be welfareimproving at the high steady state but never at the low one. Therefore, at the latter, it is optimal to reduce the green tax rate as much as possible. Conversely, the optimal tax rate is positive when the economy experiences the high steady state. This rate is unique. In the short run, the two steady states may collide and disappear through a saddle-node bifurcation. Since consumption and natural resources are substitutable goods, a limit cycle may arise around the high stationary state. To the contrary, this kind of cycles never occur around the low steady state whatever the resource e¤ect on consumption demand. Finally, focusing on the class of bifurcations of codimension two, we …nd a Bogdanov-Takens bifurcation.

Does Green Finance Promote Export Sophistication? An Analysis of the Moderating Effect Based on Green Taxes

“…Levying a green tax increases the production cost of enterprises, prompting them to reduce energy consumption and environmental pollution in the production process, thus encouraging the adoption of more complex and environmentally friendly technologies in exports, ultimately increasing the added value of export product technology innovation [39]. Second, green taxes can increase the support for regional green financing, as well as government revenue and investment in environmental protection industries [40], thereby promoting the development of environmental protection industries, improving regional green technology level, and increasing export product competitiveness. Additionally, green taxes can optimize the structure of the environmental protection industry and encourage enterprises' environmental protection standards.…”

Pollution, Human Capital, and Growth Cycles

“…Unlike our study, these studies do not obtain endogenous business cycles in equilibrium. In contrast, Wirl (2004) and Bosi and Desmarchelier (2018a) show that a limit cycle emerges in equilibrium by extending the model of Ayong Le Kama (2001), in which pollution negatively affects an environmental resource that has a positive effect on an instantaneous utility function. Furthermore, Bosi and Desmarchelier (2018b), (2018c), and (2019) develop Ramsey-type growth models in which pollution affects the disease transmission mechanism (which indirectly impacts the aggregate labor supply) and/or consumption demand, and derive a limit cycle.…”

To seed, or not to seed? An endogenous labor supply approach in a simple overlapping generation economy

“…See, for instance,Koskela et al (2002),Wirl (2004),Bella (2010),Bréchet and Lambrecht (2011), or more recentlyBosi and Desmarchelier (2018).…”