This paper analyzes the impacts of a production pollution tax on environmental capital flight and national product in a two-country static general equilibrium model with two-way foreign investment. It is assumed that the capital input in both countries is a composite good of domestic and...

Using a two-country static general equilibrium model with two goods (tradables and nontradables) and heterogeneous households (laborers and capital owners), this article analyzes how real exchange rate and income redistribution affect the optimal taxation of foreign source investment income. It...