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Parry, Ian W.H.; Oates, Wallace E.. |
This paper first describes the new literature in environmental economics on the socalled "double dividend" and then explores its implications for a broad range of economic issues. The basic finding in this literature is that in a second-best, general equilibrium setting, environmental measures raise costs and prices and thereby reduce the real wage. This rise in the cost of living reduces slightly the quantity of labor supplied in an already highly distorted labor market, giving rise to losses in social welfare that can be large relative to the basic welfare gains from improved environmental policy. These losses may be offset to some extent by using revenues (if any) from the environmental programs to reduce existing taxes on labor. This same line of... |
Tipo: Working or Discussion Paper |
Palavras-chave: Regulatory policies; Welfare effects; Pre-existing taxes; General equilibrium; Environmental Economics and Policy; L51; H23; D52. |
Ano: 1998 |
URL: http://purl.umn.edu/10687 |
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