Are the Laffer curve and the Green Paradox mutually exclusive?

Stefano Bosi () and David Desmarchelier ()
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David Desmarchelier: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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Abstract: 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)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.science/hal-04141602
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