The master equation is derived for an atom and a single high-Q cavity mode interacting with the bath modes produced by a two-mode broadband source based on two degenerate optical parametric oscillators. The relaxation superoperator, found in the resonant and dispersive limits, contains new terms describing corre_lations between the atom and the cavity mode. Collective coherent states are introduced to show that squeezed states of the atom-cavity subsystem are generated via interaction with an entangled environment. It is shown that a correlated initial state of the atom and the cavity mode manifests itself in two cavity QED phenomena: spontaneous atomic emission in the strong-coupling regime and population inversion in the Jaynes-Cummings model.
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