A Political Economic Analysis of Environmental Policy, Redistributive Policy, and Economic Growth

Abstract

We analyse an overlapping generation model in which economic agents, especially their income distribution, influence environmental policy and redistributive policy through political decision making process. In an economic equilibrium which doesn't consider political process, the introduction of environmental policy is shown to increase economic growth rate. In contrast to an economic equilibrium, environmental policy can be adopted when economic inequality reduces to a certain threshold in a political economic equilibrium. The adoption of environmental policy, on the other hand, incurs the demand of strengthened redistributive policy, which in turn decreases economic growth in a short run. We discuss broad policy implications based on our political economic analyses.

Keywords

• 소득분포(Income Distribution)
• 정치적 의사결정(Political Decisionmaking)
• 환경정책(Environmental Policy)
• 재분배정책(Redistributive Policy)
• 경제성장(Economic Growth)