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Environmental Macroeconomics: Simple Stylized Frameworks for Short-Run Analysis

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  • Arslan Razmi

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    (University of Massachusetts, Amherst)

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    Abstract

    Environmental economics has mostly focused on micro issues pertaining to welfare and efficiency analysis. I develop a general framework to address short-run issues both for a closed economy and for an open one where emission permits are globally traded. Fiscal policy and emission permit issuance can both be used as short-run stabilization tools in a closed economy although the former is ineffective in a small open economy. In a large open economy, issuing emission permits in excess of international agreements remains an effective instrument, although it acts as a beggar-thy-neighbor policy, highlighting the crucial role of global monitoring on macroeconomic grounds. JEL Categories:

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    Bibliographic Info

    Paper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2013-02.

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    Date of creation: Feb 2013
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    Handle: RePEc:ums:papers:2013-02

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    1. Herman E. Daly, 1991. "Towards an Environmental Macroeconomics," Land Economics, University of Wisconsin Press, vol. 67(2), pages 255-259.
    2. Chevallier, Julien, 2012. "Banking and Borrowing in the EU ETS: A Review of Economic Modelling, Current Provisions and Prospects for Future Design," Economics Papers from University Paris Dauphine 123456789/4611, Paris Dauphine University.
    3. Eric Neumayer, 2000. "Scarce or abundant?: the economics of natural resource availability," LSE Research Online Documents on Economics 18905, London School of Economics and Political Science, LSE Library.
    4. Sim, Nicholas C.S., 2006. "Environmental Keynesian macroeconomics: Some further discussion," Ecological Economics, Elsevier, vol. 59(4), pages 401-405, October.
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