蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Self-Fulfilling Prophecies in the Transition to Clean Technology
蝌蚪网 Journal: Macroeconomics
(pp. 304–42)
Abstract
Technological lock-in has been a standard explanation for the slow take-off of clean innovation, but is hard to reconcile with forward-looking investors who anticipate the eventual switch to clean technologies. We provide an alternative explanation: strategic investment complementarities shape innovation and self-fulfilling prophecies can lead to delayed low-carbon transition. We analyze a standard directed technical change model with clean and dirty inputs. Under good input substitutability, two stable steady states co-exist, each allowing multiple transitional paths. Optimal low-carbon transition requires a Pigouvian tax rule combined with a coordination device; commitment to a Pigouvian tax trajectory cannot solve a coordination failure.Citation
Smulders, Sjak, and Sophie Zhou. 2026. "Self-Fulfilling Prophecies in the Transition to Clean Technology." 蝌蚪网 Journal: Macroeconomics 18 (3): 304–42. DOI: 10.1257/mac.20220316Additional Materials
JEL Classification
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O31 Innovation and Invention: Processes and Incentives
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- O44 Environment and Growth
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q55 Environmental Economics: Technological Innovation