Environment, growth, and technological change in a two-country overlapping-generations model

This paper investigates the effects of a change in environmental abatement technology on the accumulation of capital stock and on the global environment in a two-country overlapping-generations model. Among other issues, we focus on a situation where abatement improves in only one country. With comparative static analysis, we derive the sufficient and necessary condition in the initial steady states for unilateral improvement in abatement technology to improve the two-country global environment. In addition, we examine the effects of changes in several technologies on capital stock and on the global environment. Copyright Springer Japan 2014