Quantifying distortions from pollution in a R&D endogenous growth model

@article{Sequeira2014QuantifyingDF,
  title={Quantifying distortions from pollution in a R\&D endogenous growth model},
  author={T. Sequeira and Alexandra Ferreira-Lopes},
  journal={Estudios De Economia},
  year={2014},
  volume={41},
  pages={149-159}
}
In this note we study the distortions in an endogenous growth model developed by Grimaud and Tournemaine (2007), where new pieces of knowledge are produced in a R&D sector and used to reduce pollution emissions. Using this model along with a realistic calibration, we conclude that the economy strongly underinvests in R&D, such that the policy maker would need to implement a strong tax-subsidy scheme to correct it. We suggest that a subsidy to human capital can also decrease the gap between… Expand
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