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Endogenous Growth, Green Innovation and GDP Deceleration in a World with Polluting Production Inputs

Kerstin Burghaus and Peter Funk ()

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: We study economic growth and pollution control in a model with endogenous rate and direction of technical change. Economic growth (growth of real GDP) results from growth in the quantity and productivity of polluting intermediates. Pollution can be controlled by reducing the pollution intensity of a given quantity through costly research (green innovation) and by reducing the share of polluting intermediate quantity in GDP. Without clean substitutes, saving on polluting inputs implies that the rate of GDP growth remains below productivity growth (deceleration). While neither green innovation nor deceleration is chosen under laissez-faire, both contribute to long-run optimal pollution control for reasonable parameter values. In our baseline-model, there are no exhaustible resources. In an extension, we analyze the e ects of resource-scarcity on the environment, long-run growth and the direction of technical change.

JEL-codes: O31 O33 Q55 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-env, nep-gro and nep-ino
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Working Paper: Endogenous Growth, Green Innovation and GDP Deceleration in a World with Polluting Production Inputs (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:80022

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