Promoting clean technologies under imperfect competition

We develop a general equilibrium multi-sector vintage capital model with energy-saving technological progress and an explicit energy market to study the impact of investment subsidies on investment and output. Energy and capital are assumed to be complementary in the production process. New machines are less energy consuming and scrapping is endogenous. The intermediate inputs sector is modelled à la Dixit-Stiglitz (1977). Two polar market structures are considered for the energy market, free entry and natural monopoly. The impact of imperfect competition on the outcomes of the decentralized equilibria are deeply characterized. We identify an original paradox: adoption subsidies may induce a larger investment into cleaner technologies either under free entry or natural monopoly. However, larger diffusion rates do not necessarily mean lower energy consumption at equilibrium, which may explain certain empirical puzzles.Energy-saving technological progress; vintage capital; market imperfections; natural monopoly; investment subsidies

Promoting clean technologies: The energy market structure crucially matters

We develop a general equilibrium vintage capital model with embodied energy- saving technological progress and an explicit energy market to study the impact of investment subsidies on investment and output. Energy and capital are assumed to be complementary in the production process. New machines are less energy con- suming and scrapping is endogenous. It is shown that the impact of investment subsidies heavily depends on the structure of the energy market, the mechanism explaining this outcome relying on the tight relationship between the lifetime of capital goods and energy prices via the scrapping conditions inherent to vintage models. In particular, under a free entry structure for the energy sector, invest- ment subsidies boost investment, while the opposite result emerges under natural monopoly if increasing returns in the energy sector are not strong enough.Energy-saving technological progress; vintage capital; energy market; natural monopoly; investment subsidies

Promoting Clean Technologies: The Energy Market Structure Crucially Matters

We develop a general equilibrium vintage capital model with embodied energy- saving technological progress and an explicit energy market to study the impact of investment subsidies on investment and output. Energy and capital are assumed to be complementary in the production process. New machines are less energy consuming and scrapping is endogenous. It is shown that the impact of investment subsidies heavily depends on the structure of the energy market, the mechanism explaining this outcome relying on the tight relationship between the lifetime of capital goods and energy prices via the scrapping conditions inherent to vintage models. In particular, under a free entry structure for the energy sector, investment subsidies boost investment, while the opposite result emerges under natural monopoly if increasing returns in the energy sector are not strong enough.Energy-saving technological progress; vintage capital; energy market; natural monopoly; investment subsidies

Human capital and growth

Proceedings of the 5th International Ph.D. School on Innovation and Economic Development, Globelics Academy 2008, Tampere, 2nd of June 13th of June, 2008.Education and skill of employees have an economic value for firms and for the economy as a whole. Main question: does growth primarily driven by ‘human capital accumulation’ or ‘stock of human capital’ (Lucas Vs. Nelson & Phelps). I Policy implications differ according to each approach

Nonlinearities in the development process: A nonparametric approach

Proceedings of the 5th International Ph.D. School on Innovation and Economic Development, Globelics Academy 2008, Tampere, 2nd of June 13th of June, 2008

Extractive Resources and Public Capital in Developing Countries: Does Public Private Partnership Matter?

International audienceThis paper investigates the relationship between extractive resources and public capital in developing countries. We rely on the IMF public capital new database which distinguishes “full public provision” capital and Public-Private Partnership capital to assess the effect of extractive resources on public capital on a sample of 95 developing countries over the period 1996-2015 using instrumental variables method. The results show that extractive resource exerts a negative effect on full public provision public capital while its effect on public-private partnership capital is positive. These effects are robust regardless of the type of extractive resources considered. Nevertheless, the negative effect of mineral resources is lower compared to energy resources (gas, coal and oil). A focus on the African region shows that both the adverse effect of extractive resources on public capital and its positive effect on public-private partnership capital are stronger. These findings shed some light on the fact that rent-seeking behavior (political or economic) might motivate public investment spending in resource-rich countries. However, “tying the hands” between the private sector and the public sector in investment projects helps to scale-up public capital. The paper calls for a closer look at the scaling-up effect of natural resources on public investment in developing countries claimed in the literature specifically when institutions are weak

Learning and convergence in networks

We study the convergence properties of learning in social and economic networks. We characterize the effect of network structure on the long-run convergent behavior and on the time of convergence to steady state. Agents play a repeated game governed by two underlying behavioral rules; they are myopic and boundedly rational. Under this setup, the long-run limit of the adoptive process converges to a unique equilibrium. We treat the dynamic process as a Markov chain and derive the bound for the convergence time of the chain in terms of the stationary distribution of the initial and steady state population configurations, and the spectrum of the transition matrix. We in turn differentiate between the two antagonistic effects of the topology of the interaction structure on the convergence time; that through the initial state and that through the asymptotic behavior. The effect through the initial state favors local interactions and sparsely connected network structures, while that through the asymptotic behavior favors densely and uniformly connected network structures. The main result is that the most efficient network topologies for faster convergence or learning are those where agents belong to subgroups in which the inter-subgroup interactions ar