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Preprints, Working Papers, ... Year : 2014

Environmental Policies under Debt Constraint

Mouez Fodha
Hiroaki Yamagami
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Abstract

This article analyzes the consequences of environmental tax policies when the government imposes a constraint on stabilizing public debt. A public sector of pollution abatement is financed by taxation and by issuing public debt. Considering a simple overlapping-generations model, the tax reform stimulates steady-state investment. Then, the environmental quality and the aggregate consumption increase if and only if (i) pollution abatement is large enough and (ii) there is under-accumulation of the per capita capital stock. This arises if environmental taxation allows a decrease of either income taxation or debt-output ratio.
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Dates and versions

halshs-01023798 , version 1 (15-07-2014)

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  • HAL Id : halshs-01023798 , version 1

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Mouez Fodha, Thomas Seegmuller, Hiroaki Yamagami. Environmental Policies under Debt Constraint. 2014. ⟨halshs-01023798⟩
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