Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71240
Authors: 
DiMaria, Corrado
Year of Publication: 
2001
Series/Report no.: 
Reihe Ökonomie / Economics Series, Institut für Höhere Studien (IHS) 105
Abstract: 
This paper presents an endogenous growth model which features elastic labour supply in order to address the distortions created by labour income and consumption taxation. Introducing elastic labour into an AK model greatly changes the structure of the model and raises problems regarding the existence and the stability of a balanced growth path. Another important feature of this paper is the presence of environmental quality both in the utility and in the production functions and the requirement that the growth path of the economy be environmentally sustainable. Within the framework outlined, the focus of the analysis is on optimal taxation and on the effects of government policy on the growth path of the economy. The basic result is that even in this simple setting the interaction between the economic and the ecological system are complex and the policy outcomes crucially depend on the parameters of the model.
Subjects: 
endogenous growth
sustainable growth
environmental externalities
elastic labour supply
optimal taxation
JEL: 
O41
D62
Q28
E62
Document Type: 
Working Paper

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