TITLE:
Optimal Environmental Policy under Endogenous Terms of Trade and Economic Growth
AUTHORS:
Alejandro Sampaolesi
KEYWORDS:
Growth, Trade, Environment, Political Economy
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.7,
August
14,
2014
ABSTRACT: The aim of this work is to
depict the main characteristics of the optimal environmental policy under
endogenous terms of trade and economic growth. Here, endogenous terms of trade
are inferred from the price of an aggregate consumption good. Our results show
that when emissions of a global pollutant affect the environment and, therefore,
the utility of the economic agents, the optimal policy consists in a pollution
tax on production.