IDEAS home Printed from
   My bibliography  Save this article

Induced technical change, adjustment costs and environmental policy modelling


  • Francesco Ferrante


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.

Suggested Citation

  • Francesco Ferrante, 1998. "Induced technical change, adjustment costs and environmental policy modelling," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 649-665.
  • Handle: RePEc:taf:applec:v:30:y:1998:i:5:p:649-665
    DOI: 10.1080/000368498325642

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Francesco Ferrante, "undated". "Cournot Competition, Technical Change and the Optimal Control of Pollution," Discussion Papers 95/3, Department of Economics, University of York.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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).

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:30:y:1998:i:5:p:649-665. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.