Implementing steady state efficiency in overlapping generations economies with environmental externalities
AbstractWe consider in this paper overlapping generations economies with polution resulting from both consumption and production. The competitive equilibrium steady state is compared to the optimal steady state from the social planner's viewpoint. We show that any competitive equilibrium steady state whose capital-labor ratio exceeds the golden rule ratio is dynamically inefficient. Moreover, the range of dynamically efficient steady states capital ratios increases with the effectiveness of the environment maintainance technology, and decreases for more polluting production technologies. We characterize some tax and transfer policies that decentralize as a competitive equilibrium outcome the social planner's steady state.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 10104.
Length: 31 pages
Date of creation: Dec 2010
Date of revision:
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More information through EDIRC
Overlapping generations; environmental externality; tax and transfer policy.;
Other versions of this item:
- DAO, Nguyen Thang & DAVILA, Julio, 2011. "Implementing steady state efficiency in overlapping generations economies with environmental externalities," CORE Discussion Papers 2011031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-14 (All new papers)
- NEP-DGE-2011-05-14 (Dynamic General Equilibrium)
- NEP-ENV-2011-05-14 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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