Green Technology Adoption and the Business Cycle | Zendy

JeanMarc Bourgeon | Zendy; Margot Hovsepian | Zendy

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Green Technology Adoption and the Business Cycle

Author(s) -

JeanMarc Bourgeon,

Margot Hovsepian

Publication year - 2017

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.2952910

Subject(s) - spillover effect , subsidy , investment (military) , order (exchange) , business cycle , economics , function (biology) , value (mathematics) , technological change , production (economics) , duopoly , environmental quality , quality (philosophy) , industrial organization , microeconomics , business , macroeconomics , market economy , finance , philosophy , epistemology , evolutionary biology , machine learning , cournot competition , politics , biology , political science , computer science , law

We analyze the adoption of green technology in a dynamic economy affected by random shocks where demand spillovers are the main driver of technological improvements. Firms' beliefs and consumers' anticipations drive the path of the economy. We derive the optimal policy of investment subsidy and the expected time and likelihood of reaching a targeted level of environmental quality under economic uncertainty. This allows us to estimate the value that should be given to the environment in order to avoid an environmental catastrophe as a function of the strength of spillover effects.

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