The environment, the endogenous growth and the endogenous labour market
In the framework of endogenous growth of Acemoglu & Aghion in "The environment and directed technical change", the paper aims at creating endogenous labor market and analyzing its effects on the environment and on the growth in the competitive equilibrium and the optimal policy. A final output is produced by two intermediary goods, one is "dirty" and the other is "clean". The "dirty" one lowers the quality of the environment. On the contrary to the initial model, we figure out the long term growth rate changes in both the competitive equilibrium and the optimal policy. As usual in the macroeconomics models with micro foundations, we find a threshold for the discount factor p when the asymptotic growth rate in competitive equilibrium is higher than in the optimal policy. Moreover, on the contrary to the initial paper, there is a case in which an environmental disaster can be avoided in competitive equilibrium when the expected enhanced productivity is not sufficiently high. Hence, there is no growth but also no disaster. In addition to the temporary policy instrument used in the initial paper, the social planner needs another subsidy which has to be permanent for incenting the workers to become scientists in the clean sector. Hence, on the contrary to the initial paper, the government intervention has to be permanent. Therefore, our results are less optimistic than those of Acemoglu & Aghion. Our results are close to Stern / Al Gore stance. Lastly, we find that if p is in the competitive equilibrium and therefore no possible degradation of the environment.
|Date of creation:||30 Jun 2011|
|Date of revision:|
|Note:||View the original document on HAL open archive server: http://dumas.ccsd.cnrs.fr/dumas-00649164|
|Contact details of provider:|| Web page: http://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daron Acemoglu, 2001.
"Directed Technical Change,"
NBER Working Papers
8287, National Bureau of Economic Research, Inc.
- Acemoglu, Daron, 1997.
"Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality,"
CEPR Discussion Papers
1707, C.E.P.R. Discussion Papers.
- Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1055-1089, November.
- Acemoglu, D., 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," Working papers 97-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- Acemoglu, Daron & Aghion, Philippe & Bursztyn, Leonardo & Hemous, David, 2011.
"The Environment and Directed Technical Change,"
CEPR Discussion Papers
8660, C.E.P.R. Discussion Papers.
- Acemoglu, Daron & Aghion, Philippe & Bursztyn, Leonardo & Hemous, David, 2010. "The Environment and Directed Technical Change," Seminar Papers 762, Stockholm University, Institute for International Economic Studies.
- Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2009. "The Environment and Directed Technical Change," NBER Working Papers 15451, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2010. "The Environment and Directed Technical Change," Working Papers 2010.93, Fondazione Eni Enrico Mattei.
- Daron Acemoglu, 2007.
"Equilibrium Bias of Technology,"
Econometric Society, vol. 75(5), pages 1371-1409, 09.
- William D. Nordhaus, 1992. "Lethal Model 2: The Limits to Growth Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 1-60.
When requesting a correction, please mention this item's handle: RePEc:hal:journl:dumas-00649164. 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: (CCSD)
If references are entirely missing, you can add them using this form.