Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74089
Authors: 
Antoci, Angelo
Year of Publication: 
2005
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 9.2005
Abstract: 
We analyse growth dynamics in an economy where the well-being of economic agents depends on three goods: leisure, a free access environmental good and a private good which can be produced by each agent through his own labour input. The private good can be consumed as a substitute for the environmental resource. The production process of the private good by each agent generates negative externalities on the other agents, by depleting the free access natural resource; but it also produces positive externalities by increasing the productivity of labour via a learning-by-doing mechanism of accumulation of knowledge [which is a pure public good]. In this context, we show that attracting steady states may exist which are Pareto-dominated by others where aggregate private consumption and labour productivity are lower. However, negative externalities can also be an engine of desirable growth: the deterioration of the environmental good can play the role of a coordination device leading economic agents to a wider exploitation of positive externalities.
Subjects: 
Self-protection choices
Consumption patterns
Negative externalities
Undesirable economic growth
Adaptive dynamics
JEL: 
D62
O11
O13
O40
Q20
Document Type: 
Working Paper

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