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    Environment, Imperfect Competition, and Trade: Insights for Optimal Policy in General Equilibrium


    Rudy, Colacicco (2016) Environment, Imperfect Competition, and Trade: Insights for Optimal Policy in General Equilibrium. Working Paper. Department of Economics, Finance & Accounting Working Paper N273-16. (Unpublished)

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    Abstract

    I build a two-country general oligopolistic equilibrium model, in which sectors differ in emissions and technologies, and pollution can be transboundary. I derive the optimal bilateral environmental policy for the economy as a whole, for the cases in which the environmental damage either linearly or quadratically increases in total pollution. The analysis highlights that the optimal emission tax can even be negative, and bilateral trade liberalization should be matched with either a rise or a fall in the optimal emission tax. The moments of the emission distribution and technology distribution across sectors are fundamental to implement optimal environmental policies.

    Item Type: Monograph (Working Paper)
    Keywords: Cournot Competition; Environmental Policy; Emission Tax; General Oligopolistic Equilibrium (GOLE); Trade Liberalization; Transboundary Pollution;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 7457
    Depositing User: Rudy Colacicco
    Date Deposited: 22 Sep 2016 13:16
    Publisher: Department of Economics, Finance & Accounting Working Paper N273-16
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