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Double dividend, dynamic Laffer effects and public abatement

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  • Fernández, Esther
  • Pérez, Rafaela
  • Ruiz, Jesús

Abstract

In a very stylized endogenous growth economy with pollution and public 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.

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  • 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.
    • Handle: RePEc:eee:ecmode:v:27:y:2010:i:3:p:656-665
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    2. Ian W.H. Parry & Antonio M. Bento, 2002. "Tax Deductions, Environmental Policy, and the "Double Dividend" Hypothesis," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 22, pages 397-426, Edward Elgar Publishing.
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    Cited by:

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    2. Marion Davin & Mouez Fodha & Thomas Seegmuller, 2023. "Pollution in a globalized world: Are debt transfers among countries a solution?," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(1), pages 21-38, March.
    3. Giménez, Eduardo L. & Rodríguez, Miguel, 2010. "Reevaluating the first and the second dividends of environmental tax reforms," Energy Policy, Elsevier, vol. 38(11), pages 6654-6661, November.
    4. Fernández, Esther & Pérez, Rafaela & Ruiz, Jesús, 2011. "Optimal green tax reforms yielding double dividend," Energy Policy, Elsevier, vol. 39(7), pages 4253-4263, July.
    5. Mireille Chiroleu-Assouline & Mouez Fodha, 2023. "Dette, taxe et politique environnementale," Revue française d'économie, Presses de Sciences-Po, vol. 0(1), pages 55-106.
    6. Jaime Alonso-Carrera & Carlos Miguel & Baltasar Manzano, 2019. "Economic Growth and Environmental Degradation When Preferences are Non-homothetic," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1011-1036, November.

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