IDEAS home Printed from https://ideas.repec.org/p/por/fepwps/378.html
   My bibliography  Save this paper

Economic Growth, Ecological Technology and Public Intervention

Author

Listed:
  • Mónica Meireles

    (Faculdade de Economia, Universidade do Porto, ISCTE-IUL, Portugal)

  • Isabel Soares

    (CEF.UP, Faculdade de Economia, Universidade do Porto, Portugal)

  • Óscar Afonso

    (CEF.UP, OBEGEF and Faculdade de Economia, Universidade do Porto, Portugal)

Abstract

Seminal works on growth theory had mainly focused on exogenous technological change, where a certain given path of technological change was considered. At the end of the 1980s, a new growth theory emerged allowing for the endogeneity of technological change, where economic agents can affect the pace of technological change and where technology is essentially interpreted as “knowledge”. The present paper aims to develop a simple endogenous growth model to study the effects of taxation on dirty intensive resources and the effects of subsidies on clean/ecological intensive resources. It also intends to analyse how exogenous environmental quality can affect the development of better quality (environmentally cleaner) inputs to production. For that, a dynamic general equilibrium growth model is considered based on the endogenous skill-biased technological change literature. It is shown that final-good sector bias is caused by the technological-knowledge bias, which is promoted by government intervention.

Suggested Citation

  • Mónica Meireles & Isabel Soares & Óscar Afonso, 2010. "Economic Growth, Ecological Technology and Public Intervention," FEP Working Papers 378, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:378
    as

    Download full text from publisher

    File URL: http://www.fep.up.pt/investigacao/workingpapers/10.06.02_wp378.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bovenberg, A Lans & Smulders, Sjak A, 1996. "Transitional Impacts of Environmental Policy in an Endogenous Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 861-893, November.
    2. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271, Elsevier.
    3. Xepapadeas, Anastasios, 1997. "Economic development and environmental pollution: traps and growth," Structural Change and Economic Dynamics, Elsevier, vol. 8(3), pages 327-350, August.
    4. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February.
    5. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    6. England, Richard W., 2000. "Natural capital and the theory of economic growth," Ecological Economics, Elsevier, vol. 34(3), pages 425-431, September.
    7. Smulders, Sjak & Gradus, Raymond, 1996. "Pollution abatement and long-term growth," European Journal of Political Economy, Elsevier, vol. 12(3), pages 505-532, November.
    8. Grimaud, Andre & Rouge, Luc, 2003. "Non-renewable resources and growth with vertical innovations: optimum, equilibrium and economic policies," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 433-453, March.
    9. Raymond Gradus & Sjak Smulders, 1993. "The trade-off between environmental care and long-term growth—Pollution in three prototype growth models," Journal of Economics, Springer, vol. 58(1), pages 25-51, February.
    10. Mohtadi, Hamid, 1996. "Environment, growth, and optimal policy design," Journal of Public Economics, Elsevier, vol. 63(1), pages 119-140, December.
    11. Lans Bovenberg, A. & de Mooij, Ruud A., 1997. "Environmental tax reform and endogenous growth," Journal of Public Economics, Elsevier, vol. 63(2), pages 207-237, January.
    12. Frank Hettich, 1998. "Growth effects of a revenue-neutral environmental tax reform," Journal of Economics, Springer, vol. 67(3), pages 287-316, October.
    13. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    14. Fullerton, Don & Kim, Seung-Rae, 2008. "Environmental investment and policy with distortionary taxes, and endogenous growth," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 141-154, September.
    15. Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June.
    16. Elbasha, Elamin H. & Roe, Terry L., 1996. "On Endogenous Growth: The Implications of Environmental Externalities," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 240-268, September.
    17. Roseta-Palma, Catarina & Ferreira-Lopes, Alexandra & Sequeira, Tiago Neves, 2010. "Externalities in an endogenous growth model with social and natural capital," Ecological Economics, Elsevier, vol. 69(3), pages 603-612, January.
    18. Smulders, J.A., 2005. "Endogenous technological change, natural resources and growth," Other publications TiSEM d6e27500-7604-420f-9961-4, Tilburg University, School of Economics and Management.
    19. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    20. Comolli, Paul, 2006. "Sustainability and growth when manufactured capital and natural capital are not substitutable," Ecological Economics, Elsevier, vol. 60(1), pages 157-167, November.
    21. Vollebergh, Herman R.J. & Kemfert, Claudia, 2005. "The role of technological change for a sustainable development," Ecological Economics, Elsevier, vol. 54(2-3), pages 133-147, August.
    22. Groth, Christian & Schou, Poul, 2007. "Growth and non-renewable resources: The different roles of capital and resource taxes," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 80-98, January.
    23. Alfred Greiner, 2005. "Fiscal Policy In An Endogenous Growth Model With Public Capital And Pollution," The Japanese Economic Review, Japanese Economic Association, vol. 56(1), pages 67-84, March.
    24. Henk Folmer & H. L. Gabel (ed.), 2000. "Principles of Environmental and Resource Economics," Books, Edward Elgar Publishing, number 1605.
    25. Peretto, Pietro F., 2009. "Energy taxes and endogenous technological change," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 269-283, May.
    26. Afonso, Oscar, 2008. "The impact of government intervention on wage inequality without scale effects," Economic Modelling, Elsevier, vol. 25(2), pages 351-362, March.
    27. Tahvonen, Olli & Kuuluvainen, Jari, 1991. "Optimal growth with renewable resources and pollution," European Economic Review, Elsevier, vol. 35(2-3), pages 650-661, April.
    28. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ricci, Francesco, 2007. "Channels of transmission of environmental policy to economic growth: A survey of the theory," Ecological Economics, Elsevier, vol. 60(4), pages 688-699, February.
    2. Oscar Afonso & Ana Catarina Afonso, 2015. "Endogenous Growth Effects of Environmental Policies," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(5), pages 607-629, December.
    3. Fullerton, Don & Kim, Seung-Rae, 2008. "Environmental investment and policy with distortionary taxes, and endogenous growth," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 141-154, September.
    4. Dagmar Nelissen & Till Requate, 2007. "Pollution-reducing and resource-saving technological progress," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(1), pages 5-44.
    5. Chu, Hsun & Lai, Ching-chong, 2014. "Abatement R&D, market imperfections, and environmental policy in an endogenous growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 41(C), pages 20-37.
    6. Antony, Jürgen & Klarl, Torben, 2022. "Poverty and sustainable development around the world during transition periods," Energy Economics, Elsevier, vol. 110(C).
    7. Chen, Jhy-hwa & Shieh, Jhy-yuan & Chang, Juin-jen & Lai, Ching-chong, 2009. "Growth, welfare and transitional dynamics in an endogenously growing economy with abatement labor," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 423-437, September.
    8. Francesco Ricci, 2007. "Environmental policy and growth when inputs are differentiated in pollution intensity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(3), pages 285-310, November.
    9. Pautrel, Xavier, 2012. "Environmental Policy, Education And Growth: A Reappraisal When Lifetime Is Finite," Macroeconomic Dynamics, Cambridge University Press, vol. 16(5), pages 661-685, November.
    10. Wei Jin & ZhongXiang Zhang, 2018. "Capital Accumulation, Green Paradox, and Stranded Assets: An Endogenous Growth Perspective," Working Papers 2018.33, Fondazione Eni Enrico Mattei.
    11. Oueslati, Walid, 2015. "Growth and welfare effects of environmental tax reform and public spending policy," Economic Modelling, Elsevier, vol. 45(C), pages 1-13.
    12. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271, Elsevier.
    13. José Manuel Madeira Belbute & Paulo Brito, 2009. "On the Relation Between the Endogenous Growth Rate of the Economy and the Dynamics of Renewable Resources," Economics Working Papers 07_2009, University of Évora, Department of Economics (Portugal).
    14. Chen Jhy-hwa & Shieh Jhy-yuan & Chang Juin-jen, 2015. "Environmental policy and economic growth: the macroeconomic implications of the health effect," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(1), pages 1-31, January.
    15. Jhy-hwa Chen & Ching-chong Lai & Jhy-yuan Shieh, 2003. "Anticipated Environmental Policy and Transitional Dynamics in an Endogenous Growth Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 233-254, June.
    16. repec:dau:papers:123456789/7769 is not listed on IDEAS
    17. Luca Spinesi, 2022. "The Environmental Tax: Effects on Inequality and Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 529-572, July.
    18. Vella, Eugenia & Dioikitopoulos, Evangelos V. & Kalyvitis, Sarantis, 2015. "Green Spending Reforms, Growth, And Welfare With Endogenous Subjective Discounting," Macroeconomic Dynamics, Cambridge University Press, vol. 19(6), pages 1240-1260, September.
    19. Evangelos V. Dioikitopoulos & Sugata Ghosh & Eugenia Vella, 2016. "Technological Progress, Time Perception and Environmental Sustainability," Working Papers 2016002, The University of Sheffield, Department of Economics.
    20. Oueslati, Walid, 2013. "Short and Long-term Effects of Environmental Tax Reform," Climate Change and Sustainable Development 146354, Fondazione Eni Enrico Mattei (FEEM).
    21. Chu, Hsun & Lai, Ching-chong & Liao, Chih-hsing, 2016. "A Note On Environment-Dependent Time Preferences," Macroeconomic Dynamics, Cambridge University Press, vol. 20(6), pages 1652-1667, September.

    More about this item

    Keywords

    economic growth; technological change; environment;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:por:fepwps:378. 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: . General contact details of provider: https://edirc.repec.org/data/fepuppt.html .

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/fepuppt.html .

    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.