We construct recursive solutions for, and study the properties of the dynamic equilibrium of an economy with three types of agents: (i) house-hold/investors who supply labor with a finite elasticity, consume a large variety of goods that are not perfect substitutes and trade government bonds;...

Using an applied general equilibrium of the Swiss economy the economic consequences of an environmental tax reform are analysed. Such a reform is followed by a substantial reduction of CO2 emissions and the use of non-renewable energy (first dividend), and a reduction of involuntary...