Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222585
Authors: 
Dioikitopoulos, Evangelos V.
Karydas, Christos
Year of Publication: 
2020
Series/Report no.: 
Economics Working Paper Series No. 20/330
Abstract: 
This paper argues that the joint relation between long-term orientation, environmental quality and innovation plays a key role in explaining environment-poverty traps. Based on empirical observations, we allow for the subjective discount rate to negatively depend on environmental quality in an R&D-driven endogenous growth model with local pollution externalities. Our model reconciles two empirical facts: i) multiple equilibria of economic and environmental development; ii) opposite responses to technological improvements depending on the initial equilibrium. Our results suggest that - in addition to traditional policies such as development aid and technology transfer - policies that aim at improving both the economic and the environmental dimension of sustainability, should also focus on changing individuals' long-term views in countries that face weak environmental conditions.
Subjects: 
endogenous growth
innovation
time preference
environmental poverty traps
economic poverty traps
JEL: 
D90
E21
O13
O44
Q55
Q56
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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