When a continuum of technologies is introduced to the model of Grossman and Helpman (1991), both continuous and discrete technological progress may occur as a result of technology choices by private firms. A good is created through R&D based on one of a continuum of technologies that differ in...

This paper examines a mechanism of liquidity-preference fluctuations caused by changes in people’s belief about a random liquidity shock. When observing the shock, they rationally update their belief so that the shock probability is higher; consequently they raise liquidity preference and...

Using an endogenous growth model with physical and human capital accumulation, this paper considers the sustainability of economic growth when the use of a polluting input (e.g., fossil fuels) intensifies the risk of capital destruction through natural disasters. We find that growth is...

This paper examines the implications of the mutual causality between environmental quality and economic growth. While economic growth deteriorates the environment through increasing amounts of pollution, the deteriorated environment in turn limits the possibility of further economic growth. In a...