Giuilio Guarini and Gabriel Porcile
Giuilio Guarini and Gabriel Porcile just published this paper that expands the canonical BOP-constrained growth (BOPG) model and Kaldorian regimes (productivity and demand regimes) in order to include some of the concerns raised by ecological economists on the sustainability of current production and consumption patterns. The demand regime is modified by taking into account Porter’s hypothesis, which suggests that environmental innovations, spurred by environmental policies, can foster competitiveness. If regulations and incentives for cleaner growth and technologies are adopted in the global economy, then the ability to produce these goods and technologies will be crucial for international competitiveness. The productivity regime in turn should consider the different growth and employment implications of innovations in labor productivity (standard innovations) and environmental efficiency (environmental innovations). It is argued that the the composition of public investment in innovation may have an impact on long run growth, employment and sustainability.