Production often causes pollution as a by-product. Once environmental degradation becomes too severe, regulation is introduced by which society forces the economy to make a transition to cleaner production processes. We model this transition as a change in general purpose technology and...

Economic theory suggests that sound and efficient financial systems - banks, equity markets, and bond markets - which channel capital to its most productive uses are beneficial for economic growth. Sound and efficient financial systems are especially important for sustaining growth in developing...