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Induced technical change, adjustment costs and environmental policy modelling

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  • Francesco Ferrante

Abstract

In this paper I develop a neo-Schumpeterianmodel of induced technical change where firms/polluters determine their effort in environment-saving technical change. Two technological scenarios are distinguished depending on whether basic research is endogenous or exogenous. Building on this analytical setting, I show that in the presence of non-linear adjustment costs the choice of instruments of environmental policy should be tailored to the actual characteristics of the firms'/polluters' technological environment. Moreover, this analysis confirms that searching for efficient environmental policy mixes is more rewarding than focusing on single instruments, notably pollution taxation.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/000368498325642
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 30 (1998)
Issue (Month): 5 ()
Pages: 649-665

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Handle: RePEc:taf:applec:v:30:y:1998:i:5:p:649-665

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Cited by:
  1. Kurt Kratena & Michael W├╝ger, 2003. "The Role of Technology in Interfuel Substitution: A Combined Cross-Section and Time Series Approach," WIFO Working Papers 204, WIFO.
  2. Srivastava, Lorie & Batie, Sandra S. & Norris, Patricia E., 1999. "The Porter Hypothesis, Property Rights, And Innovation Offsets: The Case Of Southwest Michigan Pork Producers," 1999 Annual meeting, August 8-11, Nashville, TN 21515, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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