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Production often causes pollution as a by-product. Once pollution problems become too severe, regulation is introduced … and decline of pollution can be explained by policyinduced technology shifts. …
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We study economic growth and pollution control in a model with endogenous rate and direction of technical change …. Economic growth (growth of real GDP) results from growth in the quantity and productivity of polluting intermediates. Pollution … can be controlled by reducing the pollution intensity of a given quantity through costly research (green innovation) and …
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