environmental ("carbon") tax on polluting production, as well as the effect of government spending on pollution abatement over the … cycle. In particular, a positive shock to pollution emission in the model works like a positive technological shock, but its … effect is quantitatively very small. Allowing for pollution as a by-product of production improves the model performance …

presence of pollution, and evaluated it relative to the exogenous (observed) one in Bulgaria, an economy with a largely …