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What is the best environmental policy? Taxes, permits and rules under economic and environmental uncertainty

Angelopoulos, Konstantinos; Economides, George; … - 2010

We study the importance of uncertainty and public finance to the welfare ranking of three environmental policy … revenues finance public abatement. When the main source of uncertainty is economic, the most efficient recipe is to levy … pollution taxes and use the collected tax revenues to finance public abatement. However, when environmental uncertainty is the …

Persistent link: https://www.econbiz.de/10010270638

The cost of environmental policy under induced technical change

Smulders, Sjak; Di Maria, Corrado - 2012

Conventional wisdom argues that environmental policy is less costly if environmental policy induces the development of cleaner technologies. In contrast to this argument, we show that the cost of environmental policy (a reduction in emissions) may be larger with induced technical change than...

Persistent link: https://www.econbiz.de/10010283615

How to deal with covert child labour, and give children an effective education, in a poor developing country: An optimal taxation problem with moral hazard

Cigno, Alessandro - 2010

Given that credit and insurance markets are imperfect, and given also that intra-household transfers, and much of the work a child does, are private information, the second-best policy uses a combination of need and merit based education awards, together with a mix of taxes on parental income,...

Persistent link: https://www.econbiz.de/10010270527

Environmental Policy in General Equilibrium : New Insights from a Canonical Model

Garnache, Cloé - 2020

This paper derives the incidence of a pollution tax in a stylized general equilibrium framework, building on previous work by Fullerton and Heutel (2007a). Using the CPI as numeraire, we show that tax incidence is a simpler problem than previously thought, and that general insights can be...

Persistent link: https://www.econbiz.de/10012830997

Optimal Unilateral Carbon Policy

Kortum, Samuel; Weisbach, David A. - 2021

We derive the optimal unilateral policy in a general equilibrium model of trade and climate change where one region of the world imposes a climate policy and the rest of the world does not. A climate policy in one region shifts activities—extraction, production, and consumption—in the other...

Persistent link: https://www.econbiz.de/10013314669

The welfare state redistribution and the economy : reciprocal altruism, consumer rivalry and second best

van der Ploeg, Frederick - 2004

Democratic countries with substantial inequality and where people believe that success depends on connections and luck induce political support for high tax rates and generous welfare states. Traditional wisdom is that such policies harm the economy, but there is not much evidence that countries...

Persistent link: https://www.econbiz.de/10010261225

Friedman rule in a model with endogenous growth and cash-in-advance constraint

Gahvari, Firouz - 2009

This paper introduces money into an overlapping generations model with endogenous growth. The model, due to Docquier et al. (2007), exhibits a positive intergenerational externality which precludes its laissez-fair equilibrium to be optimal even if the government can control the level of...

Persistent link: https://www.econbiz.de/10010273817

Monetary policy and redistribution: What can or cannot be neutralized with Mirrleesian taxes

Gahvari, Firouz; Micheletto, Luca - 2012

This paper develops an overlapping-generations model with heterogeneous agents in terms of earning ability and cash-in-advance constraint. It shows that tax policy cannot fully replicate or neutralize the redistributive implications of monetary policy. While who gets the extra money becomes...

Persistent link: https://www.econbiz.de/10010280805

Second-Best Source-Based Taxation of Multinational Firms

Becker, Johannes - 2021

I consider a continuum of multinational enterprises (MNEs), which differ in profitability. MNEs employ capital, shift profit to tax havens and may relocate their production facilities to other countries. Source countries provide public inputs and levy taxes. I derive optimal policy choices for...

Persistent link: https://www.econbiz.de/10013324212

Designing benefit rules for flexible retirement with or without redistribution

Simonovits, András - 2004

The traditional approach to flexible retirement (e.g. NDC) neglects the impact of asymmetric information on actuarial fairness (neutrality). The mechanism design approach (e.g. Diamond, 2003) gives up the requirement of neutrality and looks for a redistributive second-best benefit-retirement-age...

Persistent link: https://www.econbiz.de/10010261115