A Malthusian Growth Model with Pollution

Recently, a lot of contributions focused on the link between capital accumulation, growth and population dynamics, introducing fertility choice in macro-dynamic models. In this paper, we go one step further highlighting also the link with pollution. We develop a simple overlapping generations model with financial and environmental altruisms. We exhibit two steady states illustrating empirical evidence: A malthusian one and a post-malthusian one, the second being characterized by a larger capital intensity, population growth and pollution. We also show that one converges to the post-malthusian steady state as soon as the economy is not relegated to a malthusian trap. Finally, a permanent productivity shock, which can be associated to the industrialization process, allows an economy to escape the trap and converge to the post-malthusian long-run equilibrium.