This paper examines numerically the impact of a negative exogenous shock to marginal productivity (such as ecological government regulation that becomes effective at some point in time) in an endogenous finite-time growth model with sluggish reallocation of human capital. The policy can be...

This paper examines, numerically, the impact of a <em>negative</em> exogenous shock to marginal productivity (such as ecological government regulation that becomes effective at some point in time) in an endogenous finite time growth model with sluggish reallocation of human capital. The policy can be...