Environmental fiscal polices might be ineffective to control pollution
In: https://eprints.ucm.es/id/eprint/7684/1/0307.pdf
Abstract
In a one sector growth model with pollution in the utility function, the competitive equilibrium can be indeterminate for plausible values of the intertemporal substitution elasticity of consumption and under constant returns to scale. The tax rate on pollution does not enter the condition characterizing indeterminacy. This means that the government is not able to control emissions in the economy by using environmental policies. Non-separability between private consumption and pollution in the utility function is crucial for this result.
Themen
Sprachen
Englisch
Verlag
Facultad de Ciencias Económicas y Empresariales. Instituto Complutense de Análisis Económico (ICAE)
Problem melden