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A Note on Green Taxes and Double Dividends

  • Lars Hakonsen
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    Two highly influential articlesin the literature on green taxes and double dividends are Bovenbergand de Mooij (1994) and Goulder (1995). Goulder's primary concernis whether or not green tax reforms may increase welfare definedexclusive of environmental quality, while Bovenberg and de Mooijprimarily focus on the employment effects of such reforms. Unfortunately,Goulder misinterprets Bovenberg and de Mooij's results in takingthe sign of the uncompensated wage elasticity of labour supplyas being the decisive factor for whether or not welfare exclusiveof environmental quality rises under a green tax reform. Thiserror is pointed out and corrected in this note. Copyright Kluwer Academic Publishers 2001

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    Article provided by Springer & International Institute of Public Finance in its journal International Tax and Public Finance.

    Volume (Year): 8 (2001)
    Issue (Month): 1 (January)
    Pages: 75-80

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    Handle: RePEc:kap:itaxpf:v:8:y:2001:i:1:p:75-80
    DOI: 10.1023/A:1008793500470
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    1. Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S64-S77, November.
    2. Bovenberg, A. L. & van der Ploeg, F., 1994. "Environmental policy, public finance and the labour market in a second-best world," Journal of Public Economics, Elsevier, vol. 55(3), pages 349-390, November.
    3. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
    4. Myles,Gareth D., 1995. "Public Economics," Cambridge Books, Cambridge University Press, number 9780521497695, November.
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