The paper presents a general equilibrium model of endogenous growth and trade between two countries, an advanced country (A) and a backward country (B). The development stage is summarized by the level of knowledge stock accumulated through R&D investments. The latter generates technological...

The paper proposes a two-country general equilibrium model of endogenous growth and trade between two regions, North and South, with different environmental standards. Pollution is a by-product of consumption and in order to abate it the northern region unilaterally imposes a green tax on...