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Environmental policy in dynamic models with pollution by consumers: The impact of exogenous shocks and dozy politicians

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Barthel, Jens

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Abstract

The paper discusses questions resulting from a study of the interaction of exogenous shocks and environmental policy. In a model with pollution as a side effect of consumption environmental policy is introduced in the form of a consumption tax with or without a subsidy on eco-friendly investments. In simulations we observe the dynamic behavior of models before and after sudden changes of exogenous variables. These shocks are jumps in productivity or a sudden depreciation of capital. Additionally we examine the effect of a simultaneous appearance of both types of shocks. Furthermore we investigate the consequences of a lagged reaction of the policy agents.

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File URL: http://mpra.ub.uni-muenchen.de/8229/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8229.

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Date of creation: 17 Jul 2007
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Handle: RePEc:pra:mprapa:8229

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Related research
Keywords: Environmental Policy Instruments Exogenous Shocks

Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
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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  1. Bovenberg, A Lans & Smulders, Sjak A, 1996. "Transitional Impacts of Environmental Policy in an Endogenous Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 861-93, November.
  2. Brunner, Martin & Strulik, Holger, 2002. "Solution of perfect foresight saddlepoint problems: a simple method and applications," Journal of Economic Dynamics and Control, Elsevier, vol. 26(5), pages 737-753, May. [Downloadable!] (restricted)
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  3. Ligthart, Jenny E. & van der Ploeg, Frederick, 1994. "Pollution, the cost of public funds and endogenous growth," Economics Letters, Elsevier, vol. 46(4), pages 339-349, December. [Downloadable!] (restricted)
  4. Smulders, Sjak & Gradus, Raymond, 1996. "Pollution abatement and long-term growth," European Journal of Political Economy, Elsevier, vol. 12(3), pages 505-532, November. [Downloadable!] (restricted)
  5. Chung-Huang Huang & Deqin Cai, 1994. "Constant-returns endogenous growth with pollution control," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(4), pages 383-400, August. [Downloadable!] (restricted)
  6. Lans Bovenberg, A. & de Mooij, Ruud A., 1997. "Environmental tax reform and endogenous growth," Journal of Public Economics, Elsevier, vol. 63(2), pages 207-237, January. [Downloadable!] (restricted)
  7. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, vol. 57(3), pages 369-391, July. [Downloadable!] (restricted)
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