Environmental Policy Reforms and the Labor Market in a Global Economy
AbstractIn this paper, we consider the welfare effects of environmental policy cooperation in a two-country economy. We assume that the countries finance their public expenditures by using distortionary taxes, and that the countries differ with respect to competition in the labor market. The purpose is to characterize the cost benefit rule for a policy reform, where the countries involved agree to slightly increase their expenditures on abatement. We show how the welfare effect of the policy reform depends on changes in environmental damage, employment and work hours. We also relate the welfare effects of policy cooperation to the characteristics of the fiscal policies in the prereform equilibrium.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 629.
Length: 25 pages
Date of creation: 18 Mar 2004
Date of revision:
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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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Policy cooperation; distortionary taxes; labor market; Nash game; Stackelberg game;
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-22 (All new papers)
- NEP-DEV-2004-03-22 (Development)
- NEP-PBE-2004-03-22 (Public Economics)
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- Thomas Aronsson Aronsson & Thomas Jonsson & Tomas Sjögren, 2006.
"Environmental Policy and Optimal Taxation in a Decentralized Economic Federation,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 62(3), pages 437-454, September.
- Aronsson, Thomas & Jonsson, Thomas & Sjögren, Tomas, 2006. "Environmental Policy and Optimal Taxation in a Decentralized Economic Federation," UmeÃ¥ Economic Studies 669, Umeå University, Department of Economics.
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