Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171547
Authors: 
Valente, Simone
Year of Publication: 
2009
Series/Report no.: 
Economics Working Paper Series 09/104
Abstract: 
We study a two-phase endogenous growth model in which the adoption of a backstop technology (e.g. solar) yields a sustained supply of essential energy inputs previously obtained from exhaustible resources (e.g. oil). Growth is knowledge-driven and the optimal timing of technology switching is determined by welfare maximization. The optimal path exhibits discrete jumps in endogenous variables: technology switching implies sudden reductions in consumption and output, an increase in the growth rate, and instantaneous adjustments in saving rates. Due to the positive growth e¤ect, it is optimal to implement the new technology when its current consumption bene.ts are substantially lower than those generated by old technologies.
Subjects: 
Backstop technology
Discrete jumps
Endogenous growth
Exhaustible resources
Optimal Control
JEL: 
O33
Q32
Q43
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.