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Article Dans Une Revue Journal of Public Economic Theory Année : 2019

Pollution effects on preferences : A unified approach

Résumé

In this paper, we introduce a unified Ramsey model where pollution has an impact on preferences and affects both consumption demand and labor supply. Pollution comes from production activities and is viewed as a stock variable with a strong inertia. A government is introduced and levies a proportional tax on production to finance depollution expenditure. We find two interesting results when pollution raises the consumption demand (compensation effect). First, in the long run, a higher green-tax rate increases the pollution level at the steady state (green paradox) when pollution raises the labor supply (disenchantment effect). Second, in the short run, local indeterminacy can arise through a Hopf bifurcation when pollution lowers the labor supply (leisure effect) even if pollution has a strong inertia.
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Dates et versions

hal-02174027 , version 1 (04-07-2019)

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Stephano Bosi, David Desmarchelier, Lionel Ragot. Pollution effects on preferences : A unified approach. Journal of Public Economic Theory, 2019, 21 (3), pp.371-399. ⟨10.1111/jpet.12348⟩. ⟨hal-02174027⟩
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