Directed Technical Change with Human Capital and Natural Resources

Abstract

This paper investigates the effect of human capital accumulation on the direction of technical Change in a framework with natural resources and environmental externalities. The model simulates that an increasing knowledge stock of worker tends to direct technical change in favour of intangible goods under some mild economic conditions. If tangible and intangible goods are just weak Substitutes the paper further shows that economic growth in the clean sector cannot be too strong if absolute decoupling of economic growth from natural resources should be achieved.