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File name: SSRN-id1272354. ; Size: 482K
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Sectoral Heterogeneity, Resource Depletion, and Directed
Technical Change: Theory and Policy
Karen Pittel
ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)
Lucas Bretschger
ETH Zurich
September 2008
CER-ETH Working Paper No. 08/96
Abstract:
We analyze an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. Long-term dynamics are driven by resource prices, sectoral composition, and directed technical change. We study the balanced growth path and determine stability conditions. Technical change is found to be biased towards the resource-intensive sector. Resource taxes have no impact on dynamics except when the tax rate varies over time. Constant research subsidies raise the growth rate while increasing subsidies have the opposite effect. We also find that supporting sectors by providing them with productivity enhancing public goods can raise the growth rate of the economy and additionally provide an effective tool for structural policy.
Number of Pages in PDF File: 31
Keywords: sustainable development, sectoral heterogeneity, directed technical change
JEL Classification: O4, O41, Q01, Q3
working papers series
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Date posted: September 23, 2008
Suggested CitationPittel, Karen and Bretschger, Lucas, Sectoral Heterogeneity, Resource Depletion, and Directed
Technical Change: Theory and Policy (September 2008). CER-ETH Working Paper No. 08/96. Available at SSRN: http://ssrn.com/abstract=1272354 or http://dx.doi.org/10.2139/ssrn.1272354
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