A Search Theoretic Approach on Environmental Taxation under Productive Differentials: A Note |
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Authors: | Stamatina Hadjidema Konstantinos Eleftheriou |
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Institution: | 1. Department of Economics, University of Piraeus, 80 Karaoli & Dimitriou Str., 185 34, Piraeus, Greece 2. College of Business Administration, Abu Dhabi University, Abu Dhabi Campus, P.O. Box 59911, Abu Dhabi, United Arab Emirates
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Abstract: | A considerable amount of literature argues that environmental taxation fails to create a double-dividend outcome and leads to a trade-off between pollution levels and unemployment. In this paper, a simple search and matching model of labour market is developed where workers are characterized by heterogeneous productive abilities in order as to examine the impact of a pollution tax on employment. An attempt is made in order to determine the efficient level of taxation in the short run, dropping the assumption of free-entry (zero profits) of firms. |
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