Paolo Russu

Poverty trap and global indeterminacy in a growth model with open-access natural resources

In this paper we use global analysis techniques to analyze an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997) [53]). The dynamics of our model admits a locally attracting stationary state , which is, in fact, a poverty trap, coexisting with another stationary state possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, if the initial values of the state variables are close enough to the coordinates of , then there exists a continuum of equilibrium trajectories approaching and one trajectory approaching . Therefore, our model exhibits global indeterminacy, since either or can be selected according to agent expectations. Moreover, we prove that conditions guaranteeing the attractivity of also imply the saddle-point stability of . However, when is not attractive, numerical simulations show the possible existence of one or two limit cycles: an attractive one surrounding and one endowed with a two-dimensional stable manifold surrounding .

Undesirable economic growth via agents’ self-protection against environmental degradation

Abstract Our model analyzes the effects of the interplay between environmental degradation and consumption choices on economic growth dynamics and on economic agents’ welfare. We show that if private goods can be consumed as substitutes for environmental goods, then economic growth may be fueled by environmental deterioration. In this context, undesirable economic growth may occur, characterized by an inverse correlation between aggregate capital accumulation and economic agents’ welfare.

Hopf bifurcation in a environmental defensive expenditures model with time delay

In this paper a three-dimensional environmental defensive expenditures model with delay is considered. The model is based on the interactions among visitors V, quality of ecosystem goods E, and capital K, intended as accommodation and entertainment facilities, in Protected Areas (PAs). The tourism user fees (TUFs) are used partly as a defensive expenditure and partly to increase the capital stock. The stability and existence of Hopf bifurcation are investigated. It is that stability switches and Hopf bifurcation occurs when the delay t passes through a sequence of critical values, tau0. It has been that the introduction of a delay is a destabilizing process, in the sense that increasing the delay could cause the bio-economics to fluctuate. Formulas about the stability of bifurcating periodic solution and the direction of Hopf bifurcation are exhibited by applying the normal form theory and the center manifold theorem. Numerical simulations are given to illustrate the results.

Biodiversity and Economic Growth: Stabilization Versus Preservation of the Ecological Dynamics

This work examines the impact that economic growth can have on biodiversity and on the ecological dynamics that would naturally emerge in the absence of human activity. The loss of biodiversity may induce policy-makers to implement defensive actions that prevent single species from extinction. These defensive actions, however, may deeply alter the natural dynamics of interaction between species, leading to an ecological equilibrium that is completely different from the one that would exist in the absence of human intervention. This suggests that there might exist a conflict between preserving biodiversity (through stabilization of the ecological system) and preserving the intrinsic features of the ecological dynamics. To investigate this issue more deeply, we analyze the impact that different objective functions and defensive technologies can have on the natural ecological dynamics, and show that human action can modify the stability of the ecological fixed points. From the simple analytical formulations adopted in the paper, it emerges that it is possible to stabilize the ecological fixed point and consequently to avoid the extinction of a species, even in the absence of defensive expenditures specifically finalized at the protection of that species. The stabilizing. effect of human intervention, however, turns out to be enhanced when specific defensive expenditures are implemented. Finally, numerical simulations suggest that human activity can have an even deeper impact on the ecological dynamics, substantially modifying not only the stability of the fixed points, but also their number.

The Ecology of Defensive Medicine and Malpractice Litigation.

Using an evolutionary game, we show that patients and physicians can interact with predator-prey relationships. Litigious patients who seek compensation are the ‘predators’ and physicians are their ‘prey’. Physicians can adapt to the risk of being sued by performing defensive medicine. We find that improvements in clinical safety can increase the share of litigious patients and leave unchanged the share of physicians who perform defensive medicine. This paradoxical result is consistent with increasing trends in malpractice claims in spite of safety improvements, observed for example in empirical studies on anesthesiologists. Perfect cooperation with neither defensive nor litigious behaviors can be the Pareto-optimal solution when it is not a Nash equilibrium, so maximizing social welfare may require government intervention.

The cultural implications of growth: Modeling nonlinear interaction of trait selection and population dynamics

In this paper, we study a nonlinear model of the interaction between trait selection and population dynamics, building on previous work of Ghirlanda et al. [Theor. Popul. Biol. 77, 181-188 (2010)] and Antoci et al. [Commun. Nonlinear Sci. Numer. Simul. 58, 92-106 (2018)]. We establish some basic properties of the model dynamics and present some simulations of the fine-grained structure of alternative dynamic regimes for chosen combinations of parameters. The role of the parameters that govern the reinforcement/corruption of maladaptive vs. adaptive traits is of special importance in determining the models dynamic evolution. The main implication of this result is the need to pay special attention to the structural forces that may favor the emergence and consolidation of maladaptive traits in contemporary socio-economies, as it is the case, for example, for the stimulation of dysfunctional consumption habits and lifestyles in the pursuit of short-term profits.

Measuring and forecasting regional environmental and economic efficiency in Italy

ABSTRACT Environmental and economic efficiency has being receiving growing attention among researchers. In general terms, this concept is related to the capability of the economic systems to employ natural resources efficiently, so as to increase economic and human wealth. This clearly implies that both the economic and ecological aspects of decisions ought to be considered. Bearing this in mind, this article considers economic and ecological performance together, by applying data envelopment analysis and the Malmquist productivity index to investigate the efficiency of the 20 Italian regions from 2004 to 2011. The results reveal that the northern regions have been more efficient than the southern ones, highlighting the strong geographical differences between the two. Furthermore, this article uses the grey system theory to forecast regional, economic and environmental efficiency. The results of the forecasting analysis show that the north–south duality remains strong and will possibly increase since the regions in the south get worse in term of environmental and economic efficiency.

Rural Poor Economies and Foreign Investors: An Opportunity or a Risk?

In the current age of commercial and financial openness, remote and poor local economies are becoming increasingly exposed to inflows of external capital. The new investors - enjoying lower credit constraints than local dwellers - might play a propulsive role in local development. At the same time, inflows of external capital can have negative impacts on local natural resource-dependent activities. We analyze a two-sector model where both sectors damage the environment, but only that of domestic producers relies on natural resources. We assess under which conditions the coexistence of the two sectors is compatible with sustainability, defined as convergence to a stationary state characterized by a positive stock of the natural resource. Moreover, we find that capital inflows can be stimulated by an increase in the pollution intensity of incoming activities, but also in the pollution intensity of the domestic sector; in both cases, capital inflows generate environmental degradation and a decrease in welfare for the local population. Finally, we show that a reduction in the cost of capital for external investors and the consequent capital inflows have the effect to increase wages, local investments and welfare of the local populations only if the environmental impact of the external sector is relatively low with respect to that of local activities. Otherwise, an unexpected scenario characterized by a reduction in domestic capital accumulation and the impoverishment of local agents can occur.

Structural Change, Environment and Well-Being: Interactions Between Production and Consumption Choices of the Rich and the Poor in Developing Countries

Vulnerability to scarcity or to reduction of natural capital depends on defensive substitution possibilities that, in turn, are affected by the availability of other productive factors. However, in several developing countries asset distribution tends to be highly skewed. Taking into ac- count these elements, this paper argues that environmental degradation may represent a push factor of economic development in an economy polarized into two main classes (the Rich and the Poor) and characterized by the following stylized facts: a) the main income source of the rural poor is self-employment in traditional activities highly depending on natural resources; b) labor remuneration in rural sector represents the basic opportunity cost for (unskilled) labor in the economy. Thus, given that environmental degradation reduces labor productivity of the rural poor, it may depress wages; c) production of the modern sector managed by the rich is less affected by depletion of natural resources because they can adopt defensive strategies that the poor cannot. They are able to defend themselves by partially substituting natural resources with physical capital accumulation and wage labor employment. We will show that, in this context, environmental depletion may benefit the modern sector through an increase in low cost labor supply and, in turn, it may stimulate economic transition. However the structural change is likely to result in an increase in inequality.

Optimal dynamics in a two-sector model with natural resources and foreign direct investments

In this paper we analyze the optimal dynamics in an economy with three factors of production which are labor, a renewable natural resource and physical capital, and two sectors, i.e. the industrial sector and the local sector. External investors invest in the industrial sector as long as the return on the invested capital is higher than in the other economies. The activity of the industrial sector generates a negative impact on the environmental resource. In this context, we show that external investments may generate path-dependent economic dynamics. More specifically, three stationary states may coexist, two saddle points and a repellor. Furthermore, the time evolution of the stock of the environmental resource is monotonic; that is, a U-shaped path (i.e. the environmental Kuznets curve) cannot be observed along which the stock is initially decreasing and then becomes definitively increasing.