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GTAP Resource #3567

"Introducing endogenous technical change, Research and Development and a stock of knowledge in a CGE model and the GTAP database"
by Parrado, Ramiro, Andreas Löschel and Sebastian Voigt

The role technology plays has become more preponderant in a context where concerns related with climate change and growth are among the priorities of a sustainable development agenda. Furthermore, although it is a key element in explaining growth and also one of the instruments proposed to deal with climate change, it may also be influenced by climate policy. Different kinds of environmental, economic and energy models for the analysis of mitigation policies have been gradually evolving from considering technological change as an exogenous element to include it as an endogenous mechanism following ideas of theories such as endogenous growth, innovation and learning by doing.

CGE models offer a more detailed description of an economy with several sectors and regions, and, although they may lack of a detailed bottom up system; they offer a more exhaustive information about intersectoral and international flows which constitutes a potential advantage for endogenous technical progress deriving from technology, knowledge and trade spillovers since they can include and use information on R&D related services for all sectors in the model.

The main contribution of the paper is to introduce an ETC specification in a global computable general equilibrium model in order to analyze the different implications of selected policies. According to a literature review, a reasonable alternative is to include a knowledge capital stock which is also the product of investment in R&D. Although there are some challenges regarding the integration of additional data related to R&D and a stock of knowledge, the corresponding benefit is the possibility to provide details about the interaction between sectors including spillovers from trade or R&D.

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Parrado, R. (4/14/2011)
Updated: Parrado, R. (4/15/2011)
Visits: 1,535
- Technological change
- Climate change policy
- The GTAP Data Base and extensions

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