Contents

Abstract 1750

Keywords 1750

1. Introduction 1751

2. Preliminaries 1757

2.1. Scale_jCompositionandtechnique 1757

3. Stylized facts on sources and sinks 1761

4.

4.1. TheGreenSolowbenchmark 1772

4.2. Intensifying abatement: the Stokey alternative 1778

4.3. Composition shifts: the source and sink model 1787

5. Inducedinnovationandlearningbydoing 1798

5.1. Induced innovation and the Kindergarten Rule model 1799

5.1.1. Tastes 1800

5.1.2. Technologies 1801

5.1.3. Fromindividualtoaggregateproduction 1801

5.1.4. Endowments 1805

5.1.5. The Kindergarten rule 1805

5.2. Empirical implications 1810

5.3. Balanced growth path predictions 1810

5.4. The Environmental Catch-up Hypothesis 1811

5.5. TheECHandtheEKC 1813

5.6. Pollution characteristics 1814

6. Conclusion and suggestions for future research 1816

References 1819