Journal of Economic Modeling Research

    This study aims at determining the optimal environmental tax policy in the context of a dynamic model. For this purpose, clean technology diffusion was added to the AK growth model and the theoretical model has been generalized to the open economy. The main feature of the economy is creating pollution in the process of economic growth and its negative impact on social welfare. The diffusion of clean technology reduces pollution emission and has a positive effect on environmental quality and social welfare.

  The Hamiltonian solution of the model indicates that the steady state growth rate and optimal tax pollution is affected by the consumer preference toward consumption and environmental quality, pollution elasticity with respect to production, clean technology diffusion, foreign growth rate, inverse elasticity of intertemporal substitution , depreciation rate of capital and trade parameters.

  The results show that the optimal tax rate in Iranian economy is about 15 percent. Furthermore, sensitivity analysis shows that the emission elasticity of pollution subject to the production and environmental preference parameters have larger impacts on optimal tax rate than foreign growth rate and trade parameters.

Regarding to studies in different countries the research and development (R&D) play a major role in economy growth. Investment in R&D increase level of knowledge, and we have increase in production efficiency by knowledge increasing, after that economic growth will improve by productivity channel. Many studies exist on the R&D but in any of them not used the same variable for this indicator. The time series of knowledge level is not visible because of complexity the calculations and measurements of this variable. In this study the level of knowledge is intended as an unobservable variable. After that using LP and OP method the time series of this variable is extracted during the period 1974-2014 for Iranian economy. Estimates this series will be an important way for future empirical studies in research and development. Algorithms and methods that used in this paper can be run for other countries. Based on LP method, results shows during the 40 years of knowledge for Iranian economy has upward trend and the averages of grow rate of knowledge level is 0.42 percent for each year.