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Article Dans Une Revue International Journal of Economic Theory Année : 2021

Pollution effects on disease transmission and economic stability

Résumé

In this article, we embed a model of disease spread into a Ramsey model. A stock of pollution, viewed as a productive externality, affects both the disease transmission and the consumption demand. An eco-friendly government levies a proportional Pigouvian tax on production to depollute. We show the coexistence of two steady states in the long run: a disease-free and an endemic steady state. At the endemic steady state, a higher green-tax rate always reduces the pollution level. In the short run, we show the existence of limit cycles (through a Hopf bifurcation) as well as more complex dynamics of codimension two (a Gavrilov-Guckenheimer bifurcation). We complete the study with a numerical illustration of these bifurcations and a new facet of the Green Paradox: a higher tax rate can allow more scope for cycles by lowering the critical aversion to pollution and, thus, contribute to destabilization of the economy and promotion of the intergenerational inequalities.

Dates et versions

hal-03279310 , version 1 (06-07-2021)

Identifiants

Citer

Stefano Bosi, David Desmarchelier. Pollution effects on disease transmission and economic stability. International Journal of Economic Theory, 2021, 17 (2), pp.169-189. ⟨10.1111/ijet.12213⟩. ⟨hal-03279310⟩
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