Optimal Oil Taxation in a Small Open Economy
AbstractThe international oil market has been very volatile over the past three decades. In industrialized economies, especially in Europe, taxes represent a large fraction of oil prices and governments do not seem to react to oil price shocks by using oil taxes strategically. The aim of this paper is to analyze optimal oil taxation in a dynamic stochastic general equilibrium model of a small open economy that imports oil. We obtain that in general it is not optimal to distort the oil price paid by firms with taxes. Extending the model in several ways this result could be reversed depending on environmental considerations and available fiscal instruments.
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Bibliographic InfoPaper provided by Asociación Española de Economía y Finanzas Internacionales in its series Working Papers with number 02-03.
Length: 18 pages
Date of creation: May 2002
Date of revision:
Optimal oil taxation; general equilibrium; small open economies;
Other versions of this item:
- Carlos de Miguel & Baltasar Manzano, . "Optimal Oil Taxation in a Small Open Economy," Working Papers on International Economics and Finance 02-03, FEDEA.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
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