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A Theory of Dynamic Biofuel Tax Credit

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  • Ye, Fanglin
  • Lu, Liang
  • Du, Xiaoxue

Abstract

In this paper, we set up a social cost minimization problem for a government. Using dynamic optimization tools, we analytically shows how exogenous parameters could affect the optimal social cost and the optimal tax credit policy path.

Suggested Citation

  • Ye, Fanglin & Lu, Liang & Du, Xiaoxue, 2012. "A Theory of Dynamic Biofuel Tax Credit," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123750, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:123750
    DOI: 10.22004/ag.econ.123750
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    References listed on IDEAS

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    1. Caputo, Michael R., 2003. "The comparative dynamics of closed-loop controls for discounted infinite horizon optimal control problems," Journal of Economic Dynamics and Control, Elsevier, vol. 27(8), pages 1335-1365, June.
    2. Ofir D. Rubin & Miguel Carriquiry & Dermot J. Hayes, 2008. "Implied Objectives of U.S. Biofuel Subsidies," Center for Agricultural and Rural Development (CARD) Publications 08-wp459, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. Harry de Gorter & David R. Just, 2007. "The Welfare Economics of a Biofuel Tax Credit and the Interaction Effects with Price Contingent Farm Subsidies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 477-488.
    4. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
    5. Madhu Khanna & Amy W. Ando & Farzad Taheripour, 2008. "Welfare Effects and Unintended Consequences of Ethanol Subsidies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 411-421.
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    Cited by:

    1. CHIRILA, Viorica & CHIRILA, Ciprian, 2014. "Testing Stock Markets’ Integration From Central And Eastern European Countries Within Euro Zone," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 18(3), pages 76-88.
    2. Hannu Vartiainen, 2015. "Dynamic stable set as a tournament solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 309-327, September.

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    Keywords

    Environmental Economics and Policy; Resource/Energy Economics and Policy;

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