Economic Growth, Inequality, Democratization, and the Environment

We augment the Stokey (1998) model by allowing agents to differ with respect to environmental quality and income in order to analyze the impact of income and environmental inequality, and of democratization on aggregate pollution. We find that the impact of a more equal income distribution depends on the degree of democracy. In a complete democracy a more equal income distribution generates, ceteris paribus, less pollution, which is consistent with indirect empirical evidence, whereas the opposite is the case if democratic rights are highly restricted. Further-more, a democratization is argued to typically lower both the income and the environmental quality of the median voter. In this case, if, in utility terms, the fall in environmental quality is worse than the fall in consumption the median voter decides to tighten environmental legislation so that aggregate pollution decreases.Economic growth and the environment; inequality; politics

A Knife-Edge Property of Some Pollution-and-Growth Models

In some recent economic growth models there can be decreasing pollution along with increasing per capita income, if the rate of improvement in the environmenta ltechnology is sufficiently high. A central function describes how gross pollution and environmental technology interact to determine net pollution, which in the previous works has a log-linear form. This letter provides an example in which this function is generalized to a CES type. The result is that the environmental technology factor in the long run may be either implausibly potent or almost ineffective in transforming a high gross pollution to a low net pollution if the function deviates from the log-linearcase

Home bias in preferences and the political economics of agricultural protection

Some consumers are willing to pay extra for food if it is of domestic origin. This paper theoretically examines the consequences of such home biased behavior for agricultural policy, assuming that the policy is decided by the median voter. The analysis is conducted in the framework of a small open economy, with a Ricardian production structure. Consumers differ with respect to how much extra they are willing to pay for a domestically produced agricultural good. For a tariff we find that, if there would be some home biased choices (no matter how few) in a laissez-faire regime, the political equilibrium will imply a strictly positive tariff. This tariff is high if the productivity in the agricultural sector of this country is low. A political equilibrium with a strictly positive subsidy requires stronger home bias than a tariff.Biais domestique et économie politique de la protection commerciale agricole Certains consommateurs ont un consentement à payer plus élevé pour les biens alimentaires d’origine nationale. Cet article théorique analyse les conséquences de ce biais domestique sur la politique agricole, lorsque la politique est dictée par l’électeur médian. L’analyse est réalisée dans le cadre d’une petite économie ouverte, avec une structure de production de type ricardienne. Les consommateurs diffèrent par rapport à leur consentement à payer pour des produits agricoles locaux. Nos résultats montrent que, en présence de biais domestique (peu importe son importance) dans un régime de laissez faire, l’équilibre politique implique un tarif strictement positif. Ce tarif est élevé si la productivité du secteur agricole du pays est faible. Un équilibre politique avec une subvention strictement positive nécessite un biais domestique relativement élevé.Eriksson Clas. Home bias in preferences and the political economics of agricultural protection. In: Revue d’études en Agriculture et Environnement, Vol. 92, N°1, 2011. pp. 5-23

Home bias in preferences and the political economics of agricultural protection

International audienc

Home bias in preferences and the political economics of agricultural protection

Some consumers are willing to pay extra for food if it is of domestic origin. This paper theoretically examines the consequences of such home biased behavior for agricultural policy, assuming that the policy is decided by the median voter. The analysis is conducted in the framework of a small open economy, with a Ricardian production structure. Consumers differ with respect to how much extra they are willing to pay for a domestically produced agricultural good. For a tariff we find that, if there would be some home biased choices (no matter how few) in a laissez-faire regime, the political equilibrium will imply a strictly positive tariff. This tariff is high if the productivity in the agricultural sector of this country is low. A political equilibrium with a strictly positive subsidy requires stronger home bias than a tariff

A Knife-Edge Property of Some Pollution-and-Growth Models", Working Paper

Abstract In some recent economic growth models there can be decreasing pollution along with increasing per capita income, if the rate of improvement in the environmental technology is sufficiently high. A central function describes how gross pollution and environmental technology interact to determine net pollution, which in the previous works has a log-linear form. This note provides an example in which this function is generalized to a CES type. The result is that the environmental technology factor in the long run may be either implausibly potent or almost ineffective in transforming a high gross pollution to a low net pollution if the function deviates from the log-linear case

Is There a Trade-Off between Employment and Growth?

This paper investigates how unemployment and the long-run growth rate influence each other in steady state. It builds on Pissarides but Ramsey preferences are introduced, influencing the interest rate. A central finding is that there is a trade-off between successful growth and unemployment if one considers direct changes in the growth rate but, when the changes are indirect, what is good for growth is also good for employment. Thus to increase both growth and the employment rate, the policy implication seems to be that one should improve incentives (lower capital tax or unemployment benefits) rather than subsidize R&D incentives. Copyright 1997 by Royal Economic Society.