Economic growth and polluting resources: Market equilibrium and optimal policies

• Type: Article in International Scientific Journal
• Date: 2013

Authors

S. Silva (Author) Other; Isabel Soares (Author) FEP; Óscar Afonso (Author) FEP

Journal

Title: Economic Modelling

Vol. 30

Pages: 825-834

ISSN: 0264-9993

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 8 Citations

ISI Web of Science

Scopus - 7 Citations

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-002-1GV

DOI: 10.1016/j.econmod.2012.10.014

Abstract (EN): This paper develops an endogenous growth model to study the decentralized equilibrium and the optimum conditions in an economy which uses polluting resources. The model includes two policy instruments, a subsidy to final consumption and an emissions tax. It also considers two forms of endogenous technical change, pollution-reducing knowledge and horizontal innovation. We show that, if the efficiency of knowledge to reduce emissions is sufficiently high, a higher output is compatible with lower emissions in both levels and growth rates. Additionally, if the two instruments are used together the economy may achieve a higher output and lower emissions since the subsidy may offset, at least partially, the negative tax effects.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 10