Quantifying distortions from pollution in a R&D endogenous growth model
In this note we study the distortions in an endogenous growth model developed by Grimaud and Tournemaine (2007), where new pieces of knowledge are produced in a R & D sector and used to reduce pollution emissions. Using this model along with a realistic calibration, we conclude that the econ...
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| Autores principales: | , |
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| Lenguaje: | English |
| Publicado: |
Universidad de Chile. Departamento de Economía
2014
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| Materias: | |
| Acceso en línea: | http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862014000100005 |
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| Sumario: | In this note we study the distortions in an endogenous growth model developed by Grimaud and Tournemaine (2007), where new pieces of knowledge are produced in a R & D sector and used to reduce pollution emissions. Using this model along with a realistic calibration, we conclude that the economy strongly underinvests in R & D, such that the policy maker would need to implement a strong tax-subsidy scheme to correct it. We suggest that a subsidy to human capital can also decrease the gap between market and optimal allocations. |
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