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on Resource Economics |
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Issue of 2017‒10‒22
three papers chosen by |
| By: | Halkos, George; Papageorgiou, George |
| Abstract: | Public debt accumulation and pollution result to disutility while time path must be sustainable. Policy weapons available to the government with regard to public debt is the generation of primary surpluses to sustain public debt while concerning pollution environmental taxation is expected to reduce emissions. In this paper, we address these factors in a simple dynamic game in order to find ways at which the notions of public debt, pollution, and taxation are interrelated. The starting point of the model is the identity of current account as the equation of motion of public debt, while public debt is considering as a stock and the stress of the regulator is to raise the nation’s primary surplus. Nash and Stackelberg differential game solutions are used to explore the strategic interactions. In the Nash equilibrium establishment of cyclical strategies, during the game between the polluters in one hand and the government on the other, requires that the discount rate of the polluters must be greater than government’s discount rate. That is the polluters must be more impatient than the government. In the case of hierarchical setting, the analytical expressions of the strategic variables and the steady state value of public debt stock are provided. Furthermore, we found the analytical expressions of the value functions, making, therefore, the policy implications an easy task. Finally, we found the conditions under which the conflict is more intensive, in the two cases of equilibrium, according to the shadow price of the environmental damages. |
| Keywords: | Public debt; Pollution; Taxation; Dynamic games; Nash equilibrium; Stackelberg equilibrium. |
| JEL: | C72 H23 H62 Q52 Q53 Q58 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81982&r=res |
| By: | Heinz Welsch (University of Oldenburg, Department of Economics); Jan Kuehling (University of Oldenburg, Department of Economics) |
| Abstract: | Recent literature has found that individuals holding a greener self-image display higher levels of life satisfaction. We extend the single-country setting of that research to a transnational perspective and explore whether a relationship exists between green self-image (GSI) and life satisfaction (LS), both European-wide and at the national level. In order to explain differences in the GSI-LS relationship across nations and time, we study the role of pro-environmental values as a shared social norm. We find a significantly positive GSI-LS relationship in a pool of 35 European countries and in the majority of individual countries. In addition, we show that the well-being benefit of holding a green self-image is greater in societies that are less divided with respect to environmental attitudes, that is, where being green is a shared social norm. |
| Keywords: | green self-image; subjective well-being; life satisfaction; social norm; social division |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:404&r=res |
| By: | Gerlagh, Reyer (Tilburg University, Center For Economic Research); Jaimes Bonilla, Richard (Tilburg University, Center For Economic Research); Motavasseli, Ali (Tilburg University, Center For Economic Research) |
| Abstract: | Between 1950 and 2017, world average life expectancy increased from below-50 to above-70, while the fertility rate dropped from 5 to about 2.5. We develop and calibrate an analytic climate-economy model with overlapping generations to study the effect of such demographic change on capital markets and optimal climate policies. Our model replicates findings from the OLG-demography literature, such as a rise in households’ savings, and a declining rate of return to capital. We also find that demographic change raises the social cost of carbon, at 2020, from 28 euro/tCO2 in a model that abstracts from demography, to 94 euro/tCO2 in our calibrated model. |
| Keywords: | climate change; social cost of carbon; environmental policy; demographic trends |
| JEL: | H23 J11 Q54 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:7a4ee2a9-e025-4ec0-8bc8-f3bca71e57ab&r=res |