Environment and Innovation in the Knowledge-based Economy

概要

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As described in this paper, we consider problems related to the environment andeconomic growth in a knowledge-based economy. We formulate a theoretical frameworkof endogenous growth model with human capital and innovation to reflect a knowledgebasedeconomy. In the context of endogenous growth models, innovation and humancapital have been regarded in the literature (see Lucas 1988; Romer 1990; Grossmanand Helpman 1991; Aghion and Howitt 1992) as forces for promoting economic growth.In those papers, however, innovation and human capital are dealt with separately ina growth context. As described herein, we examine a theoretical framework in whichinnovation and human capital are consolidated. On the other hand, several papersdeal with the relation between the environment and economic growth (see Gradus and Smulders (1993), Stokey (1998), Brock and Taylor (2005)). These papers, however, donot properly reflect the knowledge-based economy. Therefore, we consider the problemsof environment and economic growth in the context of a theoretical framework inwhich innovation and human capital are consolidated. The growth rate of per capitaincome becomes positive in the long run because productivity increases over time bytechnological progress and human capital accumulation. We will also show that pollutiondeclines in the steady state if and only if the level of abatement technology issufficiently high.
2008-12-05