In a dynamic model of a risk-neutral competitive firm which can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the...

In a dynamic model of a risk-neutral competitive firm which can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the...

Based on a dynamic general equilibrium model we study how the composition of technical progress, along three dimensions, affects transitional dynamics, with an emphasis on the speed of convergence. The three dimensions are, first, the degree to which technical change is embodied, second, the...

This paper sets up a dynamic general equilibrium model to study how the composition of technical progress affects the asymptotic speed of convergence. The following questions are addressed: Will endogenizing a fraction of the productivity increases as coming from learning by investing help to...