Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119626
Authors: 
Ricci, Francesco
Year of Publication: 
2002
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 16.2002
Abstract: 
Environmental policy affects the distribution of market shares if intermediate goods are differentiated in pollution intensity. When innovations are environmental friendly, a tax on emissions skews demand towards new goods, which are the most productive. In this case along a balanced growth path the tax has to increase to keep the market shares of goods of different vintages constant. An increase in the burden of taxation lowers output on impact but, comparing balanced growth paths, we find that it spurs innovation. Through this channel environmental policy may increase the growth rate of the economy.
Subjects: 
Endogenous growth
environmental policy
induced technological change
JEL: 
O41
Q28
H32
O30
Document Type: 
Working Paper

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