TY - JOUR AU - Sequeira, Tiago Neves AU - Ferreira-Lopes, Alexandra PY - 2014/11/13 Y2 - 2024/03/28 TI - Quantifying distortions from pollution in a R&D endogenous growth model JF - Estudios de Economía JA - Estudios de economía VL - 41 IS - 1 SE - Articles DO - UR - https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/34427 SP - pp. 149-159 AB - In this note we study the distortions in an endogenous growth model developed by Grimaud and Tournemaine (2007), where new pieces of knowledge are produced in a R&D sector and used to reduce pollution emissions. Using this model along with a realistic calibration, we conclude that the economy strongly underinvests in R&D, such that the policy maker would need to implement a strong tax-subsidy scheme to correct it. We suggest that a subsidy to human capital can also decrease the gap between market and optimal allocations. ER -