growth model that focuses on the aggregation of capital and innovation with environmental pressure. Importantly, the paper … presents methods for computing the optimal quantity of capital-goods and innovation-goods. The paper makes the empirical … researches using US GDP data (1940 - 2010 and 1969 - 2010). The findings include that the aggregations of capital and innovation …

develops technologies which reduce the cost of pollution abatement. The innovating firm can patent this innovation and use a … licensing fee to generate revenue. In a world of certainty, the first best level of innovation and abatement can be supported by … either a pollution tax or a marketable permit. However, the returns to the innovator from innovation are not the same under …