Are the Laffer curve and the Green Paradox mutually exclusive?
Stefano Bosi and
David Desmarchelier ()
No 2016-9, EconomiX Working Papers from University of Paris Nanterre, EconomiX
To study the relationship between a Laffer Curve and the Green Paradox, we consider a Ramsey model with endogenous labor supply, where pollution increases the consumption demand (compensation effect). In the long run, the conditions for a Laffer curve and the Green Paradox are mutually exclusive: the curve exists under a weak compensation effect while the paradox under a strong effect. In the short run, limit cycles arise only if a Laffer curve exists but never occur in the case of Green Paradox.
Keywords: Ramsey model; Pollution; Laffer Curve; Green Paradox; Hopf bifurcation. (search for similar items in EconPapers)
JEL-codes: C41 O34 Q16 (search for similar items in EconPapers)
Pages: 25 pages
New Economics Papers: this item is included in nep-ene and nep-env
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Journal Article: Are the Laffer curve and the green paradox mutually exclusive? (2017)
Working Paper: Are the Laffer curve and the green paradox mutually exclusive? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2016-9
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