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Are the Laffer curve and the green paradox mutually exclusive?

Author

Listed:
  • Stefano Bosi
  • David Desmarchelier

Abstract

To study the relationship between a Laffer Curve and the Green Paradox, we consider a Ramsey model with endogenous labor supply, where pollution increases the consumption demand (compensation effect). In the long run, the conditions for a Laffer curve and the Green Paradox are mutually exclusive: the curve exists under a weak compensation effect while the paradox under a strong effect. In the short run, limit cycles arise only if a Laffer curve exists but never occur in the case of Green Paradox.
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Suggested Citation

  • Stefano Bosi & David Desmarchelier, 2017. "Are the Laffer curve and the green paradox mutually exclusive?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(5), pages 937-956, October.
    • Handle: RePEc:bla:jpbect:v:19:y:2017:i:5:p:937-956
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    File URL: http://hdl.handle.net/10.1111/jpet.2017.19.issue-5
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    Cited by:

    1. Amir, Rabah & Gama, Adriana & Maret, Isabelle, 2019. "Environmental quality and monopoly pricing," Resource and Energy Economics, Elsevier, vol. 58(C).
    2. Xiaoke Zhao & Xuhui Ding & Liang Li, 2021. "Research on Environmental Regulation, Technological Innovation and Green Transformation of Manufacturing Industry in the Yangtze River Economic Belt," Sustainability, MDPI, vol. 13(18), pages 1-15, September.
    3. Bosi, Stefano & Desmarchelier, David, 2018. "Natural cycles and pollution," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 10-20.
    4. Lin, Boqiang & Jia, Zhijie, 2019. "Tax rate, government revenue and economic performance: A perspective of Laffer curve," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    5. Estelle CAMPENET & David DESMARCHELIER, 2025. "A note on pollution inertia and endogenous cycles in Ramsey economies," Working Papers of BETA 2025-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    6. Estelle Campenet & David Desmarchelier & Markus Herrmann, 2025. "Voluntary simplicity, the Laffer Curve and the Green Paradox," Working Papers of BETA 2025-44, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    7. Guillaume Morel, 2020. "A note on pollution and infectious disease," Economics Bulletin, AccessEcon, vol. 40(4), pages 2723-2733.
    8. Guillaume MOREL, 2020. "A note on pollution and infectious disease," Working Papers of BETA 2020-38, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    9. Peng Xu & Yukun Cao & Jingye Li, 2025. "Green Paradox in the Carbon Neutrality Process: A Strategic Game About the Shipping Industry," Sustainability, MDPI, vol. 17(13), pages 1-11, June.
    10. Bosi, Stefano & Desmarchelier, David, 2019. "Local bifurcations of three and four-dimensional systems: A tractable characterization with economic applications," Mathematical Social Sciences, Elsevier, vol. 97(C), pages 38-50.

    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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