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Pollution and infectious diseases
Author(s) -
Bosi Stefano,
Desmarchelier David
Publication year - 2018
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/ijet.12157
Subject(s) - incentive , pollution , economics , industrial pollution , hopf bifurcation , work (physics) , natural resource economics , outbreak , limit (mathematics) , bifurcation , microeconomics , biology , ecology , mathematics , virology , engineering , nonlinear system , physics , mechanical engineering , quantum mechanics , mathematical analysis
Abstract Recent empirical contributions highlight the negative impact of pollution on labor supply. This relationship is explained by two mechanisms: first, pollution modifies agents’ work–leisure trade‐off as it deteriorates their working conditions (incentive effect); and second, a polluted environment is likely to generate more frequent epidemic outbreaks and to affect agents’ immune systems (health effect). Bosi et al . ([Bosi, S., 2015]) explore the aggregate consequences of the incentive effect and show that it can generate endogenous fluctuations in the economic activity. The present paper focuses on the health effect as we study a Ramsey model augmented with the spread of infectious disease. We find that industrial pollution may generate limit cycles around an endemic steady state. More precisely, the economic system may undergo a transcritical bifurcation followed by two Hopf bifurcations near this steady state.