CHANG, JUIN-JEN; CHEN, JHY-HWA; SHIEH, JHY-YUAN; LAI, … - In: Journal of Public Economic Theory 11 (2009) 4, pp. 623-651
This paper develops a dynamic real business cycle model that highlights pollution externalities (on welfare and production) and market imperfections and uses it to determine the socially optimal tax policy that encompasses labor income, capital income, and emission taxes. We show that the...