Externalities and Optimal Taxation

Coping with Externalities in Tourism - A Dynamic Optimal Taxation Approach

Optimal Control of Externalities in the Presence of Income Taxation

A substantial literature examines second-best environmental policy, focusing particularly on how the Pigouvian directive that marginal taxes should equal marginal external harms needs to be modified in light of the preexisting distortion due to labor income taxation. Additional literature is motivated by the possibility that distributive concerns should amend the internalization prescription. I...

On Taxation and the Control of Externalities

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Optimal abatement and taxation for internalizing externalities: A dynamic game with feedback strategies

In this paper we consider a dynamic nonzero-sum game between the polluting firms and the authorities. Although the proposed game is not easily solvable for the feedback case, i.e., it is not the linear quadratic case of game and not a degenerated case, we calculate explicitly a stationary feedback equilibrium. In the proposed game the regulator has the ability to turn the optimal allocation of ...

Optimal Taxation of Intermediate Goods in the Presence of Externalities: A Survey Towards the Transport Sector

The paper surveys the literature on optimal taxation with emphasis on intermediate goods, or, more specific, freight (road) transport. There are two models frequently used, first, the one emanated from Diamond & Mirrlees’ (1971) paper, where the production efficiency lemma made it clear that intermediate goods was not to be taxed. And, second, the Ramsey-Boiteux model where a cost-of-service re...