Journal
JOURNAL OF INTERNATIONAL TRADE & ECONOMIC DEVELOPMENT
Volume 26, Issue 8, Pages 885-906Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.1080/09638199.2017.1314543
Keywords
Life expectancy; environmental quality; human capital; OLG model
Categories
Funding
- Nomura Foundation
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This paper analyzes how transboundary pollution caused by the pursuit of economic growth in developing countries affects the environmental conditions and life expectancy in these countries and in neighboring developed countries. We develop an overlapping generations (OLGs) model, which considers the environmental interactions between two regions representing the developed and developing countries. We consider two models that differ in their environmental interactions: one in which the two regions share an environment and the other in which they do not. By comparing the environmental qualities of the two models' steady states, we show that the two regions sharing an environment may enter a trap characterized by both lower environmental quality and shorter life expectancy due to a free rider problem.
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