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    Short-lived agents and the long-lived environment


    Pecchenino, Rowena A. (1995) Short-lived agents and the long-lived environment. Journal of Public Economics, 58. pp. 127-141. ISSN 0047-2727

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    Abstract

    Actions that affect environmental quality both influence and respond to macroeconomic variables. Furthermore, many environmental and macroeconomic consequences of current actions will have uncompensated effects that outlive the actors. This paper presents an overlapping-generations model of environmental externalities and capital accumulation. Policies pursued by short-lived governments that affect capital accumulation and environmental quality, although myopically optimal, fail to internalize the long-lived external effects of their constituents' actions. Consequently, tax policies must be set by a long-lived government agency whose planning horizon is the environment's, not the individual agent's, lifetime.

    Item Type: Article
    Keywords: Environmental externalities; Overlapping generations; Capital accumulation;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 8518
    Identification Number: https://doi.org/10.1016/0047-2727(94)01459-2
    Depositing User: Prof. Rowena Pecchenino
    Date Deposited: 26 Jul 2017 10:58
    Journal or Publication Title: Journal of Public Economics
    Publisher: Elsevier
    Refereed: Yes
    URI:

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