ISSN:
1617-7134
Keywords:
endogenous growth
;
environmental externalities
;
environmental tax reform
;
elastic labor supply
;
optimal taxation
;
E62
;
Q28
;
O41
;
D62
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract This paper analyzes tax-policy measures within a two-sector endogenously-growing economy with elastic labor supply. Pollution is either modeled as a side product of physical capital used as a production factor in the final-good sector or as a side product of production. The framework allows us to analyze the consequences of isolated tax changes or of a revenue-neutral environmental tax reform for economic growth. Although pollution does not directly affect production processes, it can be shown that a higher pollution tax as well as a revenue-neutral environmental tax reform boost economic growth, whereas a tax on capital, consumption, or labor reduces the long-term growth rate of the economy.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF01234647
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