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- Title
Quantifying distortions from pollution in a R&D endogenous growth model.
- Authors
SEQUEIRA, TIAGO NEVES; FERREIRA-LOPES, ALEXANDRA
- Abstract
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.
- Subjects
ENDOGENOUS growth (Economics); ENDOGENEITY (Econometrics); MATHEMATICAL models of endogenous growth; ENVIRONMENTAL economics; EMISSIONS (Air pollution); LABOR economics; HUMAN capital
- Publication
Estudios de Economia, 2014, Vol 41, Issue 1, p149
- ISSN
0304-2758
- Publication type
Article