The paper develops a small open economy growth model with endogenous innovations, in the presence of environmental externalities. Building on the Grossman ad Helpman (1991) analytical framework of endogenous growth in open economies, pollution is introduced into the analysis in the form of a...

We study monetary policy in a New Keynesian (NK) model with endogenous growth and knowledge spillovers external to each firm. We find the following results: (i) technology and government spending shocks have different effects on growth; (ii) disinflationary monetary policies entail positive...