Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102196
Authors: 
Dao, Nguyen Thang
Edenhofer, Ottmar
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4865
Abstract: 
An economy with clean and dirty intermediate inputs may fall into a trap characterized by low environmental quality and low life expectancy, while the others converge to opposite steady states. We propose new strategies towards sustainable growth. They include: (i) taxes (subsidies) imposed on the production of intermediate inputs to improve environmental quality, and therefore, life expectancy and capital accumulation, in order to guarantee that an economy locked in a poverty-environment trap can escape the stagnation; (ii) taxes (subsidies) imposed on the production of intermediate inputs, consumption, and capital income in order to decentralize the transition to the social optimum.
Subjects: 
overlapping generations economy
poverty-environment trap
intermediate sectors
final good sectors
fiscal policy
JEL: 
D62
E22
H21
H23
K32
Document Type: 
Working Paper

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