Imperfect Competition, Labour Market Distortions and the Double Divident Hypothesis
The paper explores the hypothesis of a double divident from environmental taxation. It is argued that an environmental tax reform, i.e. shifting the burden of taxation away from labour toward the environment can improve environmental quality, boost employment and increase welfare. The paper presents a general equilibrium model of a closed economy. A theoretical analysis is conducted in a second best world, where the economy is distorted by labour taxes.
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|Date of creation:||1997|
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