Analytical General Equilibrium Effects of Energy Policy on Output and Factor Prices
AbstractUsing an analytical general equilibrium model, we find solutions for the effect of energy policy on factor prices as well as output prices. We calibrate the model to the U.S. economy, and we consider a tax on carbon dioxide. By looking at expenditure and income patterns across household groups, we quantify the uses-side and sources-side incidence of the tax. When households are categorized either by annual income or by total annual consumption as a proxy for permanent income, the uses-side incidence is regressive. This result is robust to sensitivity analysis over various parameter values. The sources-side incidence can be progressive, U-shaped, or regressive. Results on the sources side are sensitive to parameter values.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 10 (2011)
Issue (Month): 2 (January)
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Web page: http://www.degruyter.com
Other versions of this item:
- Don Fullerton & Garth Heutel, 2010. "Analytical General Equilibrium Effects of Energy Policy on Output and Factor Prices," NBER Working Papers 15788, National Bureau of Economic Research, Inc.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
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- Alex Bowen, 2012. "‘Green’ growth, ‘green’ jobs and labour markets," Grantham Research Institute on Climate Change and the Environment Working Papers 76, Grantham Research Institute on Climate Change and the Environment.
- Don Fullerton & Garth Heutel & Gilbert E. Metcalf, 2012.
"Does the Indexing of Government Transfers Make Carbon Pricing Progressive?,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 94(2), pages 347-353.
- Don Fullerton & Garth Heutel & Gilbert E. Metcalf, 2011. "Does the Indexing of Government Transfers Make Carbon Pricing Progressive?," NBER Working Papers 16768, National Bureau of Economic Research, Inc.
- Don Fullerton & Garth Heutel & Gilbert Metcalf, 2011. "Does the Indexing of Government Transfers Make Carbon Pricing Progressive?," CESifo Working Paper Series 3315, CESifo Group Munich.
- Fullerton, Don & Monti, Holly, 2013. "Can pollution tax rebates protect low-wage earners?," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 539-553.
- Gilbert E. Metcalf & Aparna Mathur & Kevin A. Hassett, 2011.
"Distributional Impacts in a Comprehensive Climate Policy Package,"
in: The Design and Implementation of U.S. Climate Policy, pages 21-34
National Bureau of Economic Research, Inc.
- Gilbert E. Metcalf & Aparna Mathur & Kevin A. Hassett, 2010. "Distributional Impacts in a Comprehensive Climate Policy Package," Discussion Papers Series, Department of Economics, Tufts University 0752, Department of Economics, Tufts University.
- Gilbert E. Metcalf & Aparna Mathur & Kevin A. Hassett, 2010. "Distributional Impacts in a Comprehensive Climate Policy Package," NBER Working Papers 16101, National Bureau of Economic Research, Inc.
- Bowen, Alex, 2012. "'Green'growth,'green'jobs and labor markets," Policy Research Working Paper Series 5990, The World Bank.
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