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Double Dividend in an Endogenous Growth Model with Pollution and Abatement

Author

Listed:
  • Esther Fernández Casillas

    (Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales (ICEI))

  • Rafaela Pérez Sánchez

    (Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales (ICEI))

  • Jesús Ruiz Andujar

Abstract

In a very stylized endogenous growth economy with pollution and private abatement activities and without any production externality, we show that the government may exploit dynamic Laffer effects to achieve a double dividend through an environmental tax reform, while fulfilling its commitment to provide an exogenously specified sequence of expenditures in the form of lump-sum transfers to consumers.

Suggested Citation

  • Esther Fernández Casillas & Rafaela Pérez Sánchez & Jesús Ruiz Andujar, 2008. "Double Dividend in an Endogenous Growth Model with Pollution and Abatement," Working Papers del Instituto Complutense de Estudios Internacionales 0803, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    • Handle: RePEc:ucm:wpaper:0803
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    Cited by:

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    2. Fernández, Esther & Pérez, Rafaela & Ruiz, Jesús, 2010. "Double dividend, dynamic Laffer effects and public abatement," Economic Modelling, Elsevier, vol. 27(3), pages 656-665, May.

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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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