Government policy to reduce pollution emissions within the overlapping generations model
AbstractThis article develops an overlapping generations model with multiple categories of capital. The importance of this article is in its ability to analyse changes in the distribution of various categories of capital along the growth path of the economy. Economic growth is accompanied by capital growth as well as increase in pollution emissions. Implementing a government policy to reduce pollution emission would change the equilibrium path of capital distribution. Within the model, the government builds a corporate tax function that defines the tax rate as a function of a 'desired' pollution level. The tax rate decreases as the 'desired' pollution level is higher. When the 'desired' pollution level is higher than the actual pollution level, production is subsidized and pollution levels rise. An example and a simulation are presented in order to confirm the theoretical results and demonstrate that the model can be used for empirical analysis.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 42 (2010)
Issue (Month): 23 ()
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- Maria Christidou & Theodore Panagiotidis & Abhijit Sharma, 2013.
"On the Stationarity of per Capita Carbon Dioxide Emissions over a Century,"
Working Paper Series, The Rimini Centre for Economic Analysis
48_13, The Rimini Centre for Economic Analysis.
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- Maria Christisou & Theodore Panagiotidis & Abhijit Sharma, 2013. "On the stationarity of per capita carbon dioxide emissions over a century," Discussion Paper Series 2013_02, Department of Economics, University of Macedonia, revised Dec 2013.
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