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Pigou's Dividend versus Ramsey's Dividend in the Double Dividend Literature

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Author Info
Eduardo L. Giménez Fernández () (Universidad de Vigo)
Miguel Rodríguez Méndez () (Universidad de Vigo)

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Abstract

The aims of this paper are to highlight misinterpretations of policy assessments in the double dividend literature, to specify which of the efficiency costs and benefits should be ascribed to each dividend, and then, to propose a definition for the first dividend and the second dividend. We found the Pigou's dividend more appropiate for policy guidance than the usual Ramsey's dividend. Finally, the paper analyzes a green tax reform for the US economy to illustrate the advantages of the new definitions proposed in this paper: i) overcome some shortcoming of the mainstream current definitions in the literature regarding overestimation of the efficiency costs; and, ii) provide information by themselves and not as a partial view of the whole picture.

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Publisher Info
Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2006/08.

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Length: 36 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:cea:doctra:e2006_08

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Related research
Keywords: Double dividend; Green Tax Reforms; Ramsey's dividend; Pigou's dividend;

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Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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    Other versions:
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  15. Heinz Jansen & Ger Klaassen, 2000. "Economic Impacts of the 1997 EU Energy Tax: Simulations with Three EU-Wide Models," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(2), pages 179-197, February. [Downloadable!] (restricted)
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  28. Mayeres, Inge & Proost, Stef, 1997. " Optimal Tax and Public Investment Rules for Congestion Type of Externalities," Scandinavian Journal of Economics, Blackwell Publishing, vol. 99(2), pages 261-79, June. [Downloadable!] (restricted)
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