Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171492
Authors: 
Valente, Simone
Year of Publication: 
2006
Series/Report no.: 
Economics Working Paper Series 06/48
Abstract: 
The interaction between habit formation and pollution-type ex- ternalities modifies the social optimum through discount effects and elasticity effects. If the substitution elasticity does not exceed unity, both effects reduce optimal consumption and capital in the long run, and the optimal capital-income tax increases with the relative impor- tance of habits. Similar results hold with high elasticity if the relative importance of habits is sufficiently high.
Subjects: 
externalities
habit formation
pollution
optimal growth
JEL: 
D62
D91
E21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
262.46 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.