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TECHNOLOGICAL CHANGE AND THE ENVIRONMENT

Chapter 11 TECHNOLOGICAL CHANGE AND THE ENVIRONMENTADAM B. JAFFED epartment of Economics, Brandeis University andNational Bureau of Economic Research, Waltham, MA 02454-9110, USARICHARD G. NEWELLR esources for the Future, Washington, DC 20036, USAROBERT N. STAVINSJohn F. Kennedy School of Government, Harvard University, Cambridge, MA 02138, USA andResources for the Future, Washington, DC 20036, USAC ontentsAbstract462 Keywords4621. Introduction4632. Fundamental concepts in the economics of TECHNOLOGICAL Schumpeter and the gale of creative Production functions, productivity growth , and biased TECHNOLOGICAL TECHNOLOGICAL CHANGE and endogenous economic growth4683. Invention and The induced innovation Neoclassical induced Market failures and policy Empirical evidence on induced innovation in pollution abatment and Effects of instrument choice on invention and Categories of environmental policy instruments and criteria for Theoretical Empirical Induced innovation and optimal environmental The evolutionary approach to Porter s win-win hypothesis4854.

2.2. Production functions, productivity growth, and biased technological change The measurement of the rate and direction of technological change rests fundamentally on the concept of the transformation function, T(Y,I,t) 0, (1) where Y represents a vector of outputs, I represents a vector of inputs, and t is time.

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