Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/118031
Authors: 
Marsiliani, Laura
Renström, Thomas I.
Year of Publication: 
2003
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 4.2003
Abstract: 
This paper explores the relationship between environmental protection and international capital movements, when tax policy is endogenous (through voting). A two-period general equilibrium model of a small open economy is specified to compare the effects of two different constitutions (commitment or no commitment in tax policy), as well as income inequality. Under the commitment regime, the equilibrium is characterised by a lower labour tax, higher environmental tax and less capital moving abroad than in the no-commitment equilibrium. Furthermore, given the degree of commitment, more equal societies are characterised by tougher environmental policy and less capital moving abroad.
Subjects: 
Environmental policy
international capital movements
time consistency
inequality
political economy
human capital
JEL: 
F20
H21
H23
Document Type: 
Working Paper

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