Environmental policies in a stagnant economy

In this study, we examine the impact of environmental policies on consumption and pollution emissions in cases full employment stagnant economy using a dynamic optimization model featuring monetary with persistent unemployment. If prevails, such as emission tax public abatement will naturally crowd out commodity production thereby decrease consumption. However, if there is unemployment, stimulate by increasing total mitigating deflation, simultaneously generating additional emissions. Net may eventually increase. We also optimal policy mix. • present secular demand stagnation due to money (or wealth) preference. analyze effect welfare. Under stagnation, increase find mix under stagnation.