On 10 March 2021, invited by the Division of Business and Management, Dr. Yibai Yang, Assistant Professor of University of Macau, presented a lecture to DBM academic staff. The topic of the lecture is “Environmental Regulation Stringency and Allocation between R&D and Physical Capital: A Two-Engine Growth Model”.

Dr. Hao Shi, associate professor of Applied Economic programme, gave a warm welcome and present a souvenir to the guest.

Dr. Hao Shi (right) present a souvenir to Dr. Yibai Yang (left)

In the lecture, Dr. Yang introduced his paper to our academic staff. His paper investigates environmental regulations in an endogenous growth model that features two engines of growth -- perpetual capital and innovation growth. They provide a theoretical (both analytical and numerical) analysis to sharpen the empirical observations on the distinctive responses of innovation and capital accumulation to environmental policy stringency. Analytically, they found that environmental regulations (pollution taxes) can result in an increase in innovation growth and a decrease in capital growth, provided that dirty inputs and capital are sufficiently complementary. The contrasting responses of the two growth engines lead to an inverted-U relationship between the overall GDP growth and environmental taxation. Thus, there exists a double-dividend in terms of not only improving the environment (the environmental green dividend) but also increasing economic growth and social welfare (the non-environmental blue dividend).

Dr. Yang in the lecture