Second-best tax policy and natural resource management in growing economies

Cassou, Steven P.; Gorostiaga, Arantza; Gutiérrez, María-José; Hamilton, Stephen F.

doi:10.1007/s10797-010-9130-3

Cited by 2 publications

(2 citation statements)

References 35 publications

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“…So any investigation into more general Ramsey problems need to be aware of these effects so that they are not mistaken for something else. In a related dynamic model with environmental issues (Cassou et al 2009), these price effects are always present. Under some parameterizations, these price effects are dominated by other aspects of the economy while in other parameterizations these price effects dominate.…”

Section: Discussionmentioning

confidence: 99%

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Optimal Fiscal Policy in a Multisector Model: The Price Consequences of Government Spending

Cassou

Gorostiaga

2009

J Public Economic Theory

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This paper investigates optimal fiscal policy in a static multisector model. A Ramsey type planner chooses tax rates on each good type as well as spending levels on each good type subject to an exogenous total expenditure constraint. It is shown that, like taxes, government spending policy has price effects and that these price effects have significant implications for optimal policy. These price effects imply a U shape to the government's objective function and this U shape results in boundary values for the choice of the spending allocation. In particular, it is shown that the optimal allocation of government spending tends to be concentrated on one good rather than spread among many goods. Copyright � 2009 Wiley Periodicals, Inc..

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Section: Discussionmentioning

confidence: 99%

“…4 4 In a related paper, Cassou et al (2009) investigate a richer dynamic setting for a Ramsey planner to intervene in an economy with environmental issues. In that paper, the pricing trade‐off described here is hardly noticed in many settings as other economic effects overwhelm it.…”

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confidence: 99%