On the Effect of Technological Progress on Pollution: a New Distortion in an Endogenous Growth Model
AbstractWe derive a model of endogenous growth with physical capital, human capital and technological progress through quality-ladders. We introduce welfare-decreasing pollution in the model, which can be reduced through the development of cleaner technologies. From the quantitative analysis of the model we show clear evidence that the new externality from technological progress to pollution considered in this model is sufficiently strong to induce underinvestment in R&D as an outcome of the decentralized equilibrium. An important policy implication of the main result of this article is a justification to subsidize the research in cleaner technologies.
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Bibliographic InfoPaper provided by Universidade da Beira Interior, Departamento de Gestão e Economia (Portugal) in its series Working Papers de Gestão, Economia e Marketing (Management, Economics and Marketing Working Papers) with number td09_2010.
Length: 29 pages
Date of creation: 2010
Date of revision:
Environmental Pollution; R&D; Social Capital; Human Capital; Economic Growth;
Find related papers by JEL classification:
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-29 (All new papers)
- NEP-DGE-2010-05-29 (Dynamic General Equilibrium)
- NEP-ENE-2010-05-29 (Energy Economics)
- NEP-ENV-2010-05-29 (Environmental Economics)
- NEP-FDG-2010-05-29 (Financial Development & Growth)
- NEP-INO-2010-05-29 (Innovation)
- NEP-MIC-2010-05-29 (Microeconomics)
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