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arXiv · 1512.01626

Optimal environmental tax swaps and double dividend hypothesis

Su-Mei Chen·Ling-Yun He
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Abstract

Taking environmental tax rate as given, is there an optimal allocation of tax revenues to benefit economic variables? This paper analyzes this issue in an overlapping-generations model with the pollution-related health damage. It finds the optimal allocations towards pollution abatement and labor income to maximize the steady-state lifetime welfare and per-worker output, respectively. Moreover, a greater shift towards labor income might enhance steady-state welfare while reducing per-worker output.

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Su-Mei Chen, Ling-Yun He. 2015-12-05. Optimal environmental tax swaps and double dividend hypothesis. https://arxiv.org/abs/1512.01626

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