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Labor Supply and Growth Effects of Environmental Policy under Technological Risk

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  • Christiane Clemens

    ()
    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Karen Pittel

    ()
    (ETH Zürich)

Abstract

This paper analyzes the effects of technological risk on long–run growth when labor supply is elastic and production gives rise to a pollution externality. For the social planner as well as for the market economy we show that the randomness of production as well as the endogeneity of labor supply matter with respect to the equilibrium solution. The direction in which changes in the model parameters as well as changes of policy instruments influence labor supply and growth depends crucially on the volatility of output.

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File URL: http://www.ww.uni-magdeburg.de/fwwdeka/femm/a2008_Dateien/2008_09.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Otto-von-Guericke University Magdeburg, Faculty of Economics and Management in its series FEMM Working Papers with number 08009.

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Length: 27 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:mag:wpaper:08009

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Keywords: stochastic growth; pollution; abatement; elastic labor supply;

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Cited by:
  1. Dimitrios Varvarigos, 2013. "Economic Growth, Health, and the Choice of Polluting Technologies: The Role of Bureaucratic Corruption," Discussion Papers in Economics, Department of Economics, University of Leicester 13/22, Department of Economics, University of Leicester.

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