Long run technical change in an energy-environment-economy (E3) model for an IA system: A model of Kondratiev waves

A world macroeconomic model is being developed to investigate policies for climate change and sustainable development, as a module of an IAM structure for the UK Tyndall Centre. This requires an economic model for the next 50-100 years, to show how changes in industrial structure and technology change GHG emissions. There is no suitable and generally accepted theory of long term technical change for incorporation in a macroeconomic modelling structure. However, there is now a good descriptive theory (Freeman and Louçã), which is intended to provide an economic history perspective of long term change. The objective of our model is to interpret this descriptive theory in quantitative terms, in the context of the macroeconomic analysis. It will model the dynamics of Input-Output coefficients and the implied industrial structure, incorporating endogenous technical change from R&D and investment, with learning-by-doing.