1,721,215 research outputs found
Political Institutions and Economic Growth
No full text7"Political Institutions and Economic Growth," joint wit
Optimal taxation, environment quality, socially responsible firms and investors
Full text linkWe characterize the optimal pollution-, capital- and labour-tax structure in a continuous-time model in the presence of pollution (resulting from production), both in the first- and second-best, allowing investors to be driven by social responsibility objectives. The social responsibility objective takes the form of warm-glow, as in Andreoni (1990) and Dam (2011), inducing firms to reduce pollution through increased abatement activity. Among the results, the second-best pollution tax displays an additivity property and the Chamley–Judd zero capital-income tax can be violated under warm-glow preferences. We also show that first- and second-best pollution taxes are positive, under warm-glow preferences, and, under mild assumptions, the latter yield lower first-best pollution taxes and lower pollution intensity
Editorial to the Special Issue: Sustainable Economics and Green Finance
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Can subsidies rather than pollution taxes break the trade-off between economic output and environmental protection?
Full text linkWe build a general equilibrium dynamic model in which individual investors are endowed with “warm-glow” preferences a la Andreoni (1990) so that they feel partly responsible for the pollution content of their portfolio. Through investors’ portfolio choice, firms are induced to engage in costly abatement activities, given that higher pollution also implies a higher cost of capital. In this scenario, we characterize the equilibrium of the economy and investigate, through a fiscal reform analysis, the effects of such tax instruments on the equilibrium scale of the economy, per-capita consumption, pollution abatement and “pollution premium”. We show that an increase of the pollution tax, while reducing pollution, also depresses consumption, the scale of the economy and the pollution premium. On the contrary, an increase of subsidies on abatement activity increases the scale of the economy and can also decrease pollution and the pollution premium and increase per-capita consumption. All our results have relevant testable implications, which we leave for future empirical research
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