Optimal Oil Taxation in a Small Open Economy
The international oil market has been very volatile over the past three decades. In industrialized economies, especially in Europe, taxes represent a large fraction of oil prices and governments do not seem to react to oil price shocks by using oil taxes strategically. The aim of this paper is to analyze optimal oil taxation in a dynamic stochastic general equilibrium model of a small open economy that imports oil. We find that in general it is not optimal to distort the oil price paid by firms with taxes, neither in the long run nor over the business cycle. The general result could be reversed depending on environmental considerations and available fiscal instruments. We provide simulations to illustrate the optimal response to shocks in such cases. (Copyright: Elsevier)
(This abstract was borrowed from another version of this item.)
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.fedea.net|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Patrick J. Kehoe & Andrew Atkeson, 1999.
"Models of Energy Use: Putty-Putty versus Putty-Clay,"
American Economic Review,
American Economic Association, vol. 89(4), pages 1028-1043, September.
- Andrew Atkeson & Patrick J. Kehoe, 1994. "Models of Energy Use: Putty-Putty versus Putty-Clay," NBER Working Papers 4833, National Bureau of Economic Research, Inc.
- Rotemberg, Julio J & Woodford, Michael, 1996.
"Imperfect Competition and the Effects of Energy Price Increases on Economic Activity,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 28(4), pages 550-77, November.
- Julio J. Rotemberg & Michael Woodford, 1996. "Imperfect Competition and the Effects of Energy Price Increases on Economic Activity," NBER Working Papers 5634, National Bureau of Economic Research, Inc.
- Julio J. Rotemberg & Michael Woodford, 1993.
"Energy Taxes and Aggregate Economic Activity,"
NBER Working Papers
4576, National Bureau of Economic Research, Inc.
- Carlos de Miguel & Baltasar Manzano & Jose M. Martin-Moreno, 2003. "Oil Price Shocks and Aggregate Fluctuations," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 47-61.
- Chari, V.V. & Kehoe, Patrick J., 1999.
"Optimal fiscal and monetary policy,"
Handbook of Macroeconomics,
in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 26, pages 1671-1745
- Mary G. Finn, 1991. "Energy price shocks, capacity utilization and business cycle fluctuations," Discussion Paper / Institute for Empirical Macroeconomics 50, Federal Reserve Bank of Minneapolis.
- In-Moo Kim & Prakash Loungani, 1991.
"The role of energy in real business cycle models,"
Working Paper Series, Macroeconomic Issues
91-6, Federal Reserve Bank of Chicago.
- Atkinson, A. B. & Stiglitz, J. E., 1972. "The structure of indirect taxation and economic efficiency," Journal of Public Economics, Elsevier, vol. 1(1), pages 97-119, April.
- Finn, Mary G., 1995. "Variance properties of Solow's productivity residual and their cyclical implications," Journal of Economic Dynamics and Control, Elsevier, vol. 19(5-7), pages 1249-1281.
- Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
- Diamond, P. A. & McFadden, D. L., 1974. "Some uses of the expenditure function in public finance," Journal of Public Economics, Elsevier, vol. 3(1), pages 3-21, February.
- Lawrence H. Goulder, 1994. "Energy Taxes: Traditional Efficiency Effects and Environmental Implications," NBER Chapters, in: Tax Policy and the Economy, Volume 8, pages 105-158 National Bureau of Economic Research, Inc.
- Bizer, David S & Stuart, Charles, 1987. "The Public Finance of a Protective Tariff: The Case of an Oil Import Fee," American Economic Review, American Economic Association, vol. 77(5), pages 1019-22, December.
When requesting a correction, please mention this item's handle: RePEc:fda:fdadef:02-03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmen Arias)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.