Exploring the macroeconomic fluctuations under different environmental policies in China: A DSGE approach
Ying Fan and
Energy Economics, 2018, vol. 76, issue C, 439-456
Due to the uncertain effects on economic growth and economic fluctuations caused by environmental policies, the best means of choosing the most appropriate environmental policy remains controversial. In the face of various uncertain economic factors, economic fluctuation is an important criterion for evaluating different environmental policies. Thus, we established an environmental dynamic stochastic general equilibrium model under New Keynesian framework embodying nominal price rigidities, environmental policies, pollutant emissions and real uncertainties with the aim of comparing the impacts of different environmental policies on the macroeconomic fluctuations. The results are as follows. First, the responses indicate that all kinds of environmental policies are counter-cyclical. Emissions intensity policy has the strongest effect on curbing fluctuations. Second, a positive energy efficiency shock will lead to a corresponding increase in energy inputs, which is referred to as the energy rebound effect, as well as a rise in pollutant emissions. Third, an emissions intensity shock will exert greater impacts than environmental tax rate shock and emissions cap shock. Fourth, the lower is the price dispersion the less intermediate goods are needed, and, consequently, the lower are the pollutant emissions. Taken together, the results highlight the policy implications associated with choosing an environmental policy.
Keywords: Dynamic stochastic general equilibrium (DSGE); Macroeconomic fluctuation; Environmental policy; Policy comparison; Pollutant emissions (search for similar items in EconPapers)
JEL-codes: E32 H23 O13 Q53 Q56 Q58 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:76:y:2018:i:c:p:439-456
Access Statistics for this article
Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant
More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Haili He ().