TRIMs, environmental taxes, and foreign investment
Various second-best policy mixes of investment measures and environmental taxes for a polluted, small open economy with foreign capital and immovable trade restrictions are examined. The optimal policy mix depends on the types of trade restrictions. When tariffs are in place, strict policies of pollution taxes and export requirements are optimal for alleviating tariff-induced consumption and production distortions. When involuntary quotas are used in lieu of tariffs, however, the optimal policy mix is a zero export requirement and Pigouvian taxes on pollution. For the case of VERs, however, the optimal policy demands export requirements and a less stringent pollution tax.
Year of publication: |
2000
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Authors: | Chao, Chi-Chur ; Yu, Eden S.H. |
Published in: |
Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 33.2000, 3, p. 799-817
|
Publisher: |
Canadian Economics Association - CEA |
Saved in:
Online Resource
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