Overlapping generations economy, environmental externalities, and taxation

Nguyen Thang Dao

No 2, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: I set up in this paper an overlapping generations economy with envi-ronment degrading itself and pollution resulting from both consumption and production to show that there always exists an inter-temporal equi-librium and to determine the competitive steady state. This steady state is compared with the equilibrium steady state in the social benevolent planner's point of view. The paper shows the optimal golden rule allo-cation which maximizes the total utility of all generations, and whenever the capital ratio in the competitive framework is higher than the golden rule capital ratio, the economy stands on the dynamically inecient point. The width of the inecient range of capital ratio depends positively on the environment maintaining technology and depends negatively on the cleanness of production technology. For such any competitive economy, I introduce some combinations of taxes and transfer with purpose of de-centralizing the best steady state attainable through the good and factors markets.

Keywords: overlapping generations; environmental externality; taxes and transfer scheme. (search for similar items in EconPapers)
JEL-codes: D62 E21 H21 H41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://depocenwp.org/upload/pubs/DaoNguyenThang/Ov ... xation_DEPOCENWP.pdf (application/pdf)

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:dpc:wpaper:0211

Access Statistics for this paper

More papers in Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam Contact information at EDIRC.
Bibliographic data for series maintained by Doan Quang Hung ().