Does Technical Progress Increase Long-Run Welfare?
We study an economy where households invest in capital and cause negative externalities on a renewable resource entering their utility function. There are also endogenous technical progress boosting labor productivity and the possibility of investing in resource-saving technical progress. Within this setup, we compare two regimes. Under “laissez-faire”, households ignore the externalities they cause: the resource is asymptotically depleted and perpetual economic growth is generated, but households’ welfare remains stagnant in the long run. Under an authority imposing the internalization of the externalities, long-run growth tends to be depressed but the resource is preserved and households’ welfare increases forever.
|Date of creation:||Sep 2004|
|Contact details of provider:|| Postal: Piazza S.Francesco,7 - 53100 Siena|
Web page: http://www.deps.unisi.it/
More information through EDIRC
References listed on IDEAS
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.:
- de Bruyn, S. M. & van den Bergh, J. C. J. M. & Opschoor, J. B., 1998. "Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves," Ecological Economics, Elsevier, vol. 25(2), pages 161-175, May.
- Daron Acemoglu, 2002.
"Directed Technical Change,"
Review of Economic Studies,
Oxford University Press, vol. 69(4), pages 781-809.
- Daron Acemoglu, 2001. "Directed Technical Change," NBER Working Papers 8287, National Bureau of Economic Research, Inc.
- Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
- Oswald, Andrew, 1997. "Happiness and Economic Performance," The Warwick Economics Research Paper Series (TWERPS) 478, University of Warwick, Department of Economics.
- Oswald, A.J., 1997. "Happiness and Economic Performance," Papers 18, Centre for Economic Performance & Institute of Economics.
- Daron Acemoglu, 2003. "Labor- And Capital-Augmenting Technical Change," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 1-37, 03.
- Daron Acemoglu, 2000. "Labor- and Capital- Augmenting Technical Change," NBER Working Papers 7544, National Bureau of Economic Research, Inc.
- Emmanuel M. Drandakis & Edmond S. Phelps, 1965. "A Model of Induced Invention, Growth and Distribution," Cowles Foundation Discussion Papers 186, Cowles Foundation for Research in Economics, Yale University.
- Ayres, Robert U., 1995. "Economic growth: politically necessary but not environmentally friendly," Ecological Economics, Elsevier, vol. 15(2), pages 97-99, November.
- Toman, Michael & Simpson, R. David & Ayres, Robert, 2004. "Scarcity and Growth in the New Millennium: Summary," Discussion Papers dp-04-01, Resources For the Future.
- Kaufmann, Robert K. & Cleveland, Cutler J., 1995. "Measuring sustainability: needed--an interdisciplinary approach to an interdisciplinary concept," Ecological Economics, Elsevier, vol. 15(2), pages 109-112, November.
- Bartolini, Stefano & Bonatti, Luigi, 2002. "Environmental and social degradation as the engine of economic growth," Ecological Economics, Elsevier, vol. 43(1), pages 1-16, November. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:usi:wpaper:435. 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: (Fabrizio Becatti)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.