Optimal growth when environmental quality is a research asset

Abstract

If environmental quality positively a ects the productivity of labor in R&D and pollution is caused by the use of a non-renewable resource, it is socially optimal to postpone extraction and to intertemporally adjust R&D e ort.

Directed Technical Change and Economic Growth Effects of Environmental Policy

“…The calibration procedure is divided into four steps. First, parameters present in other growth models are assigned values from previous papers: α = 0.4 and λ = 0.5 (from Ricci 2007a), and θ = 2.5 and ρ = 0.2 (from Groth and Ricci 2011). Assuming that it is equally difficult to invent new production and abatement intermediate good qualities: η = λ = 0.5.…”

Natural Resources as an Energy Source in a Simple Economic Growth Model

“…In addition to the case of oil, other non-renewable natural resources are also in general mostly sources of energy and fuel; therefore, they all should be considered in growth theory as a factor of production, which is complementary to physical capital. Meanwhile, in many studies, natural resources are treated as essential but are introduced in models as substitutes (mostly in a Cobb-Douglas production function) to physical capital or other factors of productionstarting with the famous Dasgupta-Heal-Solow-Stiglitz (DHSS for short) approach (Dasgupta and Heal (1974), Solow (1974), Stiglitz (1974)), to more recent studies (among many others, Barbier (1999), Scholz and Ziemes (1999), Gaitan and Roe (2005), Shou (2002, 2007), Groth (2004Groth ( , 2005, Rougé (2008, 2014), da Silva (2008), Groth and Ricci (2011), Pittel and Bretschger (2010), Cabo et al (2010), de Cavalcanti et al (2011), Neustroev (2013, Bretschger (2017)). Less frequently, there are also some examples of papers in which substitution between natural resources and physical capital is limited or even changes over time as a result of technological progress (Smulders, de Nooij (2003), Di Maria, Valente (2008), Growiec and Schumacher (2008), Bretschger and Smulders (2012), Bretschger (2013), Stuermer and Schwerhoff (2013), Voosholz (2014)).…”

“…In addition to the case of oil, other non‐renewable natural resources are also in general mostly sources of energy and fuel; therefore, they all should be considered in growth theory as a factor of production, which is complementary to physical capital. Meanwhile, in many studies, natural resources are treated as essential but are introduced in models as substitutes (mostly in a Cobb‐Douglas production function) to physical capital or other factors of production–starting with the famous Dasgupta‐Heal‐Solow‐Stiglitz (DHSS for short) approach (Dasgupta and Heal (), Solow (), Stiglitz ()), to more recent studies (among many others, Barbier (), Scholz and Ziemes (), Gaitan and Roe (), Groth and Shou (, ), Groth (, ), Grimaud and Rougé (, ), da Silva (), Groth and Ricci (), Pittel and Bretschger (), Cabo et al . (), de Cavalcanti et al .…”