relation: http://eprints.imtlucca.it/3879/
title: Long-run welfare under externalities in consumption, leisure, and production: A case for happy degrowth vs. unhappy growth
creator: Bilancini, Ennio
creator: D'Alessandro, Simone
subject: HB Economic Theory
subject: HC Economic History and Conditions
description: In this paper we contribute to the debate on the relationship between growth and well-being by examining an endogenous growth model where we allow for externalities in consumption, leisure, and production. We analyze three regimes: a decentralized economy where each household makes isolated choices without considering their external effects, a planned economy where a myopic planner fails to recognize both leisure and consumption externalities but recognizes production externalities, and a planned economy with a fully informed planner. We first compare the balanced growth paths under the three regimes and then we numerically investigate the transition to the optimal balanced growth path. We provide a number of findings. First, in a decentralized economy growth or labor (or both) are greater than in the regime with a fully informed planner, and hence are sub-optimal from a welfare standpoint. Second, a myopic intervention which overlooks consumption and leisure externalities leads to more growth and labor than in both the decentralized and the fully informed regime. Third, we provide a case for happy degrowth: a transition to the optimal balanced growth path that is associated with downscaling of production, a reduction in private consumption, and an ongoing increase in leisure and well-being.
publisher: Elsevier
date: 2012
type: Article
type: PeerReviewed
identifier:   Bilancini, Ennio and D'Alessandro, Simone  Long-run welfare under externalities in consumption, leisure, and production: A case for happy degrowth vs. unhappy growth.  Ecological Economics, 84.  pp. 194-205.  ISSN 0921-8009      (2012)  
relation: https://doi.org/10.1016/j.ecolecon.2011.10.023
relation: doi: 10.1016/j.ecolecon.2011.10.023