Structural Change with Joint Production of Consumption and Environmental Pollution: A Neo-Austrian Approach

25 Pages Posted: 19 Jan 2005 Last revised: 20 Feb 2015

Ralph Winkler

University of Bern - Department of Economics; University of Bern - Oeschger Centre for Climate Change Research

Abstract

This paper examines whether and to what extent the well known necessary and sufficient conditions for the innovation of a new production technique remain valid if the new production technique jointly produces an unwanted and at least potentially harmful output. The formal framework employed here is an extension of the neo-Austrian three-process model as introduced in [Struct. Change Econ. Dyn. 2 (1991) 143]. Three possible ways of comparing the desired consumption output and the negative environmental side-effects in the innovation decision are introduced: a technical, an ecological and an economic solution. Although adjusted necessary and sufficient conditions can be derived, full replacement of the old production technique cannot be achieved in general.

Keywords: Environmental pollution, Neo-Austrian capital theory, Innovation of techniques, Joint production, Structural change

JEL Classification: O33, Q21, L11

Suggested Citation

Winkler, Ralph, Structural Change with Joint Production of Consumption and Environmental Pollution: A Neo-Austrian Approach. Structural Change and Economic Dynamics, Vol. 16, No. 1, pp. 111-135, 2005. Available at SSRN: https://ssrn.com/abstract=650222

Ralph Winkler (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, 3001
Switzerland
+41 31 631 4508 (Phone)

HOME PAGE: http://www.ralph-winkler.de

University of Bern - Oeschger Centre for Climate Change Research ( email )

Zähringerstrasse 25
Bern, 3012
Switzerland

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