Munich Personal RePEc Archive

Environmental policy in dynamic models with pollution by consumers: The impact of exogenous shocks and dozy politicians

Barthel, Jens (2007): Environmental policy in dynamic models with pollution by consumers: The impact of exogenous shocks and dozy politicians.

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Abstract

The paper discusses questions resulting from a study of the interaction of exogenous shocks and environmental policy. In a model with pollution as a side effect of consumption environmental policy is introduced in the form of a consumption tax with or without a subsidy on eco-friendly investments. In simulations we observe the dynamic behavior of models before and after sudden changes of exogenous variables. These shocks are jumps in productivity or a sudden depreciation of capital. Additionally we examine the effect of a simultaneous appearance of both types of shocks. Furthermore we investigate the consequences of a lagged reaction of the policy agents.

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