Creative Destruction vs Destructive Destruction ?: A Schumpeterian Approach for Adaptation and Mitigation

Can Mavi

Working Papers from HAL

Abstract: This article aims to show how a market exposed to a catastrophic event finds the balance between adaptation and mitigation policies through R&D policy. We also study the effect of pollution tax on the long-run growth rate and the implications of catastrophe probability on this effect. Our results suggest that the economy can increase its R&D level even with a higher catastrophe probability. This is possible only if the penalty rate due to an abrupt event is sufficiently high. We show that pollution tax could increase the long-run growth. Additionally, the catastrophe probability increases the amplitude of this positive effect if the penalty rate is high enough. Lastly, we show that the pollution growth could be higher with less polluting inputs, which we call a Jevons type paradox.

Keywords: Occurence Hazard; Endogenous Technological Change; Abrupt damage; Mitigation; Adaptation (search for similar items in EconPapers)
Date: 2017-12-08
New Economics Papers: this item is included in nep-env, nep-gro and nep-ino
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01455297v2
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-01455297v2/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-01455297

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().