Escaping Lock-In: The Scope for a Transition Towards Sustainable Growth?

33 Pages Posted: 21 Mar 2002

See all articles by Reyer Gerlagh

Reyer Gerlagh

Tilburg University - Tilburg University School of Economics and Management

Marjan W. Hofkes

Vrije Universiteit Amsterdam

Date Written: January 2002

Abstract

In this paper we develop a simple endogenous growth model with two competing production technologies and learning spillover effects between firms that use the same technology. Investments are directed to the technology with highest current and expected returns. Since current investments increase future returns through learning, the economy will usually lock in, that is specialise in one of the two technologies. In case the economy has selected a relative polluting technology, sustainable growth requires a transition towards the clean technology. We analyse the scope for (environmental) policies that induce such a transition. expectations

Keywords: Endogenous growth, lock-in, transition, convergent

JEL Classification: O41

Suggested Citation

Gerlagh, Reyer and Hofkes, Marjan W., Escaping Lock-In: The Scope for a Transition Towards Sustainable Growth? (January 2002). FEEM Working Paper No. 12.2002. Available at SSRN: https://ssrn.com/abstract=304319 or http://dx.doi.org/10.2139/ssrn.304319

Reyer Gerlagh (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Marjan W. Hofkes

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands

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