Maria Elisabetta Tessitore

Economic Growth and the Environment with Clean and Dirty Consumption

This paper aims to verify the existence of the Environmental Kuznets Curve (EKC) or inverted U-shaped relationship between economic growth and environmental degradation in the context of endogenous growth. An important feature of this study is that the EKC is examined in the presence of pollution as a by product of consumption activities; also, pollution is a stock variable rather than a flow and tends to accumulate over time. In order to highlight the role of consumption on the environment, consumers do not consider directly pollution in the maximization problem and are assumed to choose between two different consumption types, characterized by a different impact on the environment (i.e. dirty and clean consumption). We find that substitution of dirty consumption with clean consumption alone is not sufficient to reduce environmental pollution. The result depends on the product differentiation and the cost to achieve it. From a social welfare perspective, more environmental awareness is unambiguously desirable when it generates less pollution. However, it could be that more environmental awareness leads to a lower level of social welfare depending on the costs of product differentiation and social marginal damage of pollution.

Some Insights on Procrastination: A Curse or a Productive Art?

The choice between performing a task today or procrastinating it until tomorrow or later is the building block of any economic action. In our paper, we aim to enrich the theoretical literature on procrastination by allowing for the possibility of good procrastination together with bad procrastination, and by documenting how procrastination may arise from incomplete information and hyperbolic discounting without further departures from standard preference assumptions. More specifically, we look at the special cases of pathological procrastination, the curse of perfectionism and productive procrastination. We further discuss how our theoretical framework may be applied to different types of (education, investment and production) microeconomic decisions and outline how optimal policy measures change when we consider the possibility of good as well as bad procrastination.