Policy Under Superposition: A Quantum-Inspired Portfolio Approach to Innovation-Led Green Growth

Spring-Ragain (2025) proposes mapping macroeconomic dynamics into a quantum framework with non-commuting operators and path integrals. This project operationalizes that insight for innovation policy. Treat policy instruments—IPR strength (Alexiou, 2025), green finance (Bughio et al., 2023), and carbon pricing/renewable support (Wei et al., 2023; Ahmed & Elfaki, 2023)—as operators whose order matters because they change firms’ state space differently. For example, strengthening patents before scaling green finance may initially raise emissions (Alexiou, 2025) by spurring brown innovation rents, whereas the reverse order could tilt expectations and finance toward clean technologies. The contribution is twofold: a theoretical framework to model policy sequencing effects (non-commutativity) and an empirical approximation strategy via moment inequalities and ARDL/event-study designs to test for order effects in historical policy episodes (e.g., EU ETS phases, national IPR reforms, green bond market expansions). The novelty lies in turning “policy mix” from a static checklist into a dynamic sequence problem under radical uncertainty, offering robust sequencing rules that maximize long-run green TFP and growth while minimizing transitional emissions overshoots.

References:

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5. The short- and long-run causal correlation between green finance, renewable energy consumption, and economic growth. Amanullah Bughio, Ying Teng, Raza Ali Tunio, Ghansham Das, R. Jamali, R. Shar (2023). Energy & Environment.