Crescita, ambiente e commercio internazionale in un modello con innovazioni tecnologiche

Eleonora Cavallaro ()

No 48, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: The paper develops a small open economy growth model with endogenous innovations, in the presence of environmental externalities. Building on the Grossman ad Helpman (1991) analytical framework of endogenous growth in open economies, pollution is introduced into the analysis in the form of a flow of emissions which are ultimately linked to the aggregate production of goods and reduce consumers’ utility. The paper assesses the effects on welfare of the international specialisation for a small open economy which adopts a policy of pollution control, and allows for the consideration of mixed permits and tax schemes. Emphasis is placed on the analysis of the overall direct and indirect distortions which may negatively affect the environment and reduce the gains from trade, and on the consequent second best policy problems. The elimination of environmental distortions may in fact result in a reduction of the growth rate of the economy, unless investment in knowledge capital, that is in clean technologies, is introduced. The latter appears to be essential in order to loose the trade off between growth and environmental protection. The paper stresses the need for the international co-ordination of both trade and environmental policies, in the context of the increasing globalisation of trade markets which brings about a strengthening of price competition among countries, especially in times of a slowdown of economic activity.

Keywords: sustainable development; international trade; endogenous growth; economic policy. (search for similar items in EconPapers)
JEL-codes: F18 F43 O38 Q20 (search for similar items in EconPapers)
Pages: 32
Date: 2002-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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