Endogenous preferences, technical change and sustainability

In this thesis we relax several assumptions of economic growth theory and investigate the effects on sustainability and economic growth. Specifically, we are concerned with the preferences of the agents and technological change. In the first part we generalize the preferences of the agents to incorporate behavioural characteristics which are, under certain situations, deemed important features for decision taking. In the first chapter we model and study the effects of getting used to pollution'. We observe that this can lead to violations of two standard criteria of sustainability, which suggests that getting used to pollution' can be another source of intergenerational inequity. In the second and third chapter we endogenise the discount rate via wealth. The first contribution is to demonstrate that the sign of the utility function leads to qualitative changes in models of endogenous discounting in general. The second contribution relates the implications of this extension to the literature on Twin-Peaks of Economic Growth. In the second part we further study the implications of relaxing several assumptions on technical change. The first article considers a RamseyHotelling economy whose production function takes a CES bundle of non-renewable and renewable resources as its input. We allow for exogenous technical change in the elasticity of substitution between these two types of resources as well as for technical change in the distribution parameter. Our results provide new considerations for the debate on natural resources in production, with contributions partly through analytical long-run results and partly through numerical short-run results. The last article in this thesis derives an R&D-based semi-endogenous growth model where technological progress depends on the available amount of technological opportunity. While studying the long-run and short-run implications we focus on the possibility for this setup to create endogenous business cycles.Doctorat en sciences économiques (ECON 3)--UCL, 200