October 10, 2010

Pollution Externalities in a Schumpeterian Growth Model

by Simon Koesler

- Global warming, the pollution of the seas or a continuously increasing noise level are just a few examples of environmental issues that have alerted the global public in recent years. To shed further light on this question, a standard Schumpeterian growth model is enlarged to include an environmental dimension. Thereby it explicitly links the pollution intensity of economic activity to the overall level of technological progress. More precisely, it is assumed that pollution arises as an externality of the intermediate good production process and the amount of pollution created in the production process crucially depends on the overall level of technological progress.

Koesler, S. (2010). "Pollution Externalities in a Schumpeterian Growth Model." ZEW Discussion Paper No. 10-055, Aug 2010.