Scarcity, growth and R&amp;D

Tsur, Yacov; Zemel, Amos

doi:10.1016/j.jeem.2004.07.001

Cited by 58 publications

(93 citation statements)

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“…Powell and Oren [39] derive how a planner would invest in backstop capacity when choosing between the use of a non-renewable input in production and a backstop (see also Wirl [61]). Just et al [29] study the optimal timing of investing in R&D if there is uncertainty over the length of time needed 4 This result is closer to Tsur and Zemel [57].…”

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confidence: 72%

“…With respect to the backstop technology, our modeling approach builds upon Heal [23] and the subsequent line of literature (Clark [10], Hanson [22], Tahvonen and Salo [55], Tsur and Zemel [56], [57]). Heal [23], Clark [10] and Hanson [22] consider a Ramsey-type economy where production uses capital and energy as complementary inputs.…”

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confidence: 99%

“…We have a benevolent social planner who maximizes utility of consumption subject to the economy resource constraint, which allows for an important trade-off that leads to qualitatively different results compared to Tsur and Zemel [56]. This setting is then similar to Tsur and Zemel [57], who, instead of studying learning-by-doing as a means of reducing the cost of the backstop technology, study R&D efforts. 3 In the case of cost reductions via learning-by-doing we do not recover Tsur and Zemel's [56] result, which is that R&D activities should be undertaken directly at the maximal affordable rate.…”

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confidence: 99%

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Learning-by-doing and the costs of a backstop for energy transition and sustainability

Jouvet

Schumacher

2012

Ecological Economics

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We assess the impact of being able to substitute an unlimited but costly energy substitute (like wind, solar) for a non-renewable resource (like oil, coal) in a model of sustainable growth. The prospects for sustainability on the optimal path depend crucially on the costs of this substitute.Furthermore, the poorer a country, measured in terms of capital stock at a given point in time, the later it should switch to the renewable substitute, and the more likely it will be unsustainable. Taking learning-by-doing in account, we find that this leads to an earlier switching time but does not guarantee sustainability.JEL Classification: Q21, Q32, Q42, Q56. Key words: backstop technology; non-renewable resource; resource substitution; sustainability; learning-by-doing. * EconomiX, University of Paris Ouest and Climate Economics Chair, e-mail: pjouvet@u-paris10.fr. † Banque centrale du Luxembourg, 2, boulevard Royal, L-2983 Luxembourg, Luxembourg, email: ingmar.schumacher@bcl.lu. We are grateful to Katheline Schubert for discussions and thank two anonymous referees as well as the editor for their comments. The views and opinions expressed here do not necessarily reflect those of the Banque centrale du Luxembourg.

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Learning-by-doing and the costs of a backstop for energy transition and sustainability

Jouvet

Schumacher

2012

Ecological Economics

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“…Both the occurrence and the damage ratios of natural disasters are assumed to be idiosyncratic across time and location. 9 Then, by the law of large numbers, the total damages to aggregate physical 8 Although we ignore the finiteness of polluting inputs (e.g., fossil fuels), sustainability of growth under nonrenewable resources has been examined by, for example, Grimaud and Rougé (2003), Tsur and Zemel (2005), and Groth and Schou (2007). Elíasson and Turnovsky (2005) examined the growth dynamics with a resource that recovers only gradually.…”

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confidence: 99%

Natural disasters in a two-sector model of endogenous growth

Ikefuji

Horii

2012

Journal of Public Economics

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Using an endogenous growth model with physical and human capital accumulation, this paper considers the sustainability of economic growth when the use of a polluting input (e.g., fossil fuels) intensifies the risk of capital destruction through natural disasters. We find that growth is sustainable only if the tax rate on the polluting input increases over time. The long-term rate of economic growth follows an inverted V-shaped curve relative to the growth rate of the environmental tax, and it is maximized by the least aggressive tax policy of those that asymptotically eliminate the use of polluting inputs. Unavailability of insurance can accelerate or decelerate the growth-maximizing speed of the tax increase depending on the relative significance of the risk premium and precautionary savings effects. Welfare is maximized under a milder environmental tax policy, especially when the pollutants accumulate gradually.

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“…where I R '(t), I m '(t) and I a' '(t) are determined by (20), (24), and (25). As shown below, the optimal long-term growth with inactive regulation, E<E max , is possible only at n>d (see …”

Section: Definition 1 the Balanced Growth Path (Bgp) Is A Solution (mentioning

confidence: 99%

Scarcity, regulation and endogenous technical progress

Boucekkine

Hritonenko

Yatsenko

2011

Journal of Mathematical Economics

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We consider a firm with the following characteristics: (i) it has a vintage capital technology with two complementary factors, capital and a resource input subject to quota; (ii) the resource is increasingly scarce through an exogenously rising price, (iii) scrapping of obsolete capital is endogenous; (iv) technological progress allows saving the regulated input and is endogenous through R&D investment; (v) the innovation rate increases with R&D investment and decreases with complexity; (vi) the firm is price-taker and liquidity-constrained. We show that there exists a threshold level for the growth rate of the resource price above which the firm will collapse. Below this threshold, two important properties are found out. In the long-run, a sustainable growth is possible at a growth rate which is independent of the resource price. In the short-run, not only will the firms respond to increasing resource price by increasing R&D on average, but they will also reduce capital expenditures and speed up the scrapping of older capital goods. Finally, we identify optimal intensive Vs extensive transitional growth regimes depending on the history of the firms.

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Scarcity, growth and R&D

Cited by 58 publications

References 20 publications

Learning-by-doing and the costs of a backstop for energy transition and sustainability

Learning-by-doing and the costs of a backstop for energy transition and sustainability

Natural disasters in a two-sector model of endogenous growth

Scarcity, regulation and endogenous technical progress

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