Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234922 
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1110
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
Using a dynamic optimization model of a monetary economy where persistent unemployment can prevail, we examine the effects of environmental policies on consumption and pollution emissions in a full-employment and a stagnant economy. If full employment prevails, environmental policies such as environmental tax and public pollution abatement naturally crowd out commodity production and hence decrease consumption. However, if unemployment appears, they stimulate consumption and production by increasing total employment and mitigating deflation, thus yielding additional pollution emissions. Net pollution emissions may eventually increase. The optimal environmental policy mix is also examined.
Subjects: 
Secular stagnation
Unemployment
Public abatement
Environmental tax
JEL: 
E24
O42
Q58
Document Type: 
Working Paper

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