ENVIRONMENTAL QUALITY, LIFE EXPECTANCY, AND SUSTAINABLE ECONOMIC GROWTH

I construct a model of a growing economy with pollution. The analysis of the model shows that the interactions between capital accumulation, endogenous longevity and environmental quality determine both the long-run growth rate of the economy and the pattern of convergence (i.e., monotonic or cyclical) towards the balanced growth path. I argue that such interactions can provide a possible explanatory factor behind the, empirically observed, negative correlation of long-run growth with its short-term cycles. Furthermore, the model may capture the observed pattern whereby economic growth and mortality rates appear to be negatively related in the long-run, but positively related in the short-run