This paper explores the dynamics of the economic growth rate in the presence of an explicit link between the agricultural biotechnology and environmental protection in an endogenous growth model. The modeling strategy is that the government per-announce policy that imposes a lump-sum tax and the technology to the biotechnology development low pollution agriculture is being subsidized. Our find anticipated the taxes and subsidies will influence the steady-state economic growth rate and the short-run growth rate. We show that an increase in the steady-state economic growth rate is due to the expansion of biotechnology in a agricultural production technology has innovative technological change and improve quality of environment and the dynamics of the short-run growth rate results in the transitional behavior.
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