The Economic Consequences of Effective Carbon Taxes

Felix Kapfhammer

American Economic Journal: Macroeconomics, 2026, vol. 18, issue 3, 174-99

Abstract: This paper studies the sectoral and macroeconomic consequences of carbon taxes in four Nordic countries using a novel monthly measure of effective carbon tax rates. The suggested measure accounts for the time-varying emission coverage of taxes that are both explicitly and implicitly levied on greenhouse gas-emitting goods, thereby solving several issues of existing carbon tax measures currently used by the literature. Employing the new measure in a local projection setting, I find that carbon taxes reduce emissions as expected but also impair macroeconomic activity—though there is some heterogeneity in the effects across sectors and countries.

JEL-codes: H23 O44 Q54 Q58 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mac.20230083 (application/pdf)
https://doi.org/10.3886/E222921V1 (text/html)
https://www.aeaweb.org/articles/materials/25582 (application/pdf)
https://www.aeaweb.org/articles/materials/25583 (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:18:y:2026:i:3:p:174-99

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/mac.20230083

Access Statistics for this article

American Economic Journal: Macroeconomics is currently edited by Simon Gilchrist

More articles in American Economic Journal: Macroeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().