Environmental quality and pollution-saving technological change in a two-sector endogenous growth model

Environment;Technological Change;Growth Models;Pollution;Sustainable Development

Transitional impact of environmental policy in an endogenous growth model

Growth Models;Environmental Policy;environmental economics

Sustainability and Substitution of Exhaustible Natural Resources: How Resource Prices Affect Long-Term R&D Investments

Traditional resource economics has been criticised for assuming too high elasticities of substitution, not observing material balance principles and relying too much on planner solutions to obtain long-term growth.By analysing a multi-sector R&D based endogenous growth model with exhaustible natural resources, labour, knowledge, and physical capital as inputs, the present paper addresses this critique.We study transitional dynamics and the long-term growth path and identify conditions under which firms keep spending on research and development.We demonstrate that long-run growth can be sustained under free market conditions even when elasticities of substitution between capital and resources are low and the supply of physical capital is limited, which seems to be crucial for today's sustainability debate.economic growth;natural resources;investment;incentives;technological change;sustainable development;prices;research and development

Pollution and endogenous growth

Economic Growth;Pollution;economische groei

The Double Dividend Hypothesis and Trade Liberalization

This paper studies how simultaneously liberalizing trade and tightening environmental policy affect welfare in a second-best world. We consider a three-good two-factor small open economy. We allow for non-tradables and for market power in the export market. The government is constrained to balance its budget at all times through distortionary taxes: a given income transfer has to be financed out of tariff and pollution tax revenue. We show that the switch from trade tariffs to environmental taxes can yield an increase in real income thus providing a second dividend in addition to the environmental improvement.environmental policy;trade liberalization;double dividend;non-tradables

A Note on the Relation between Income and Welfare

This notes shows how intertemporal and cross-section welfare are related in a general class of stochastic continuous time models. In the steady state intertemporal welfare is shown to be proportional to cross-sectional income. This result holds for economies where each agent maximizes his own expected discounted utility. That is, we do not assume that aggregate utility is maximized. We provide an application to search in the labor market and one to pollution externalities.