Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098479 | Journal of Economic Dynamics and Control | 2014 | 18 Pages |
Abstract
We develop an endogenous growth model featuring environmental externalities, abatement R&D, and market imperfections. We compare the economic performances under three distinct regimes that encompass public abatement, private abatement without tax recycling, and private abatement with tax recycling. It is found that the benefit arising from private abatement will be larger if the degree of the firms' monopoly power is greater. With a reasonably high degree of monopoly power, a mixed abatement policy by which the government recycles environmental tax revenues to subsidize the private abatement R&D is a plausible way of reaching the highest growth rate and welfare.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Hsun Chu, Ching-chong Lai,