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Economic Growth, Ecological Technology and Public Intervention

  • 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)

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.

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File URL: http://www.fep.up.pt/investigacao/workingpapers/10.06.02_wp378.pdf
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 378.

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Length: 33 pages
Date of creation: Jun 2010
Date of revision:
Handle: RePEc:por:fepwps:378
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