Green Innovation And Economic Growth In A North-South Model

Jan Witajewski-Baltvilks and Carolyn Fischer

No 10/2018, IBS Working Papers from Instytut Badan Strukturalnych

Abstract: If one region of the world switches its research effort from dirty to clean technologies, will other regions follow? To investigate this question we built a North-South model that combines insights from directed technological change and quality ladder endogenous growth models. We allow researchers in the South to create business-stealing innovations. We found that (i) after the North switches from dirty to clean technologies, the growing value of clean markets will motivate technology firms in the South to follow the switch; however this result is conditional on the North being sufficiently large. (ii) If the two regions invest research effort to different sectors and the outputs of the two sectors are gross substitutes, then the long run growth rates in both regions are smaller than if the global research effort were to be invested in one sector. (iii) If the North switches to R&D in clean technologies, the benevolent central planner in the South would ensure that all South R&D switches too, unless the planner’s discount rate is high.

Keywords: directed technological change; green growth; endogenous growth model; cross-country spillovers; unilateral climate policy; green R&D subsidies (search for similar items in EconPapers)
JEL-codes: O33 O41 O44 Q55 Q56 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018-12
New Economics Papers: this item is included in nep-ene, nep-env, nep-gro, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Green Innovation and Economic Growth in a North–South Model (2023)
Working Paper: Green Innovation and Economic Growth in a North-South Model (2022)
Working Paper: Green Innovation And Economic Growth In A North-South Model (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ibt:wpaper:wp102018

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