Optimal Oil Taxation in a Small Open Economy

Carlos de Miguel and Baltasar Manzano

No 02-03, Working Papers from Asociación Española de Economía y Finanzas Internacionales

Abstract: The international oil market has been very volatile over the past three decades. In industrialized economies, especially in Europe, taxes represent a large fraction of oil prices and governments do not seem to react to oil price shocks by using oil taxes strategically. The aim of this paper is to analyze optimal oil taxation in a dynamic stochastic general equilibrium model of a small open economy that imports oil. We obtain that in general it is not optimal to distort the oil price paid by firms with taxes. Extending the model in several ways this result could be reversed depending on environmental considerations and available fiscal instruments.

Keywords: Optimal oil taxation; general equilibrium; small open economies (search for similar items in EconPapers)
JEL-codes: H21 Q48 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2002-05
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Related works:
Journal Article: Optimal Oil Taxation in a Small Open Economy (2006)
Working Paper: Optimal Oil Taxation in a Small Open Economy
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Persistent link: https://EconPapers.repec.org/RePEc:aee:wpaper:0203

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