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

"environmental" output tax levied on the polluting firm's output, 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 …, but less so along the environmental dimension, so more research is needed to understand the aggregate effects of pollution. …

-consistent policy rules that implement the stochastic first best as long as a future market exists. We apply our theory to carbon …