9321325 Manuelli This project consists of three topics all concerned with the relationship between public policy and economic growth. The first focuses on the effectiveness of collective choice mechanisms in implementing policies that determine pollution in a growth context. At issue is whether or not the rising income associated with the process of development will result in more stringent environmental controls. In the process of analyzing this issue, the consequences of the irreversibility of pollution effects and the impact on the intergenerational distribution of welfare are analyzed. A related issue is the effect of free trade both on the overall level of pollution, as well as its allocation across countries. Specific interest is focused on understanding both the short-run effect of a switch to free trade and the dynamic impact that the development process has on "pollution trading" The second topic concerns the effects of the design of systems to protect property rights such as patents, copyrights, and trade secret laws on the incentives to innovate and the consequences for the overall rate of development of the economy. The third topic analyzes the effect of instability on the growth rate of the economy. Among the issues to be investigated is the impact of volatile tax and spending policies on the average level of growth through the effect on investment. ***
