법경제
Working Paper
Controlling Stock Externalities : Flexible versus Inflexible Pigouvian Corrections
요약
This paper examines the use of fixed(inflexible) one-time
Pigouvian tax/subsidy to correct a stock externality. An optimal
control framework is first used to characterize the optimal path
for a Pigouvian correction in a first-best case where the
tax/subsidy can be varied at each instant. The first-best path is
then contrasted with the second-best path for the stock
externality and emissions when an inflexible policy is used. The
optimal timing of the inflexible policy is also examined. A
deferment of the fixed one-time correction may sometimes be
desirable when the initial state of the stick is less deteriorated
than the frist-best steady state. Transaction costs are shown to
augment deferral time. When, however, the initial state is more
deteriorated than the frist-best steady state, a deferment is
never desirable.
Pigouvian tax/subsidy to correct a stock externality. An optimal
control framework is first used to characterize the optimal path
for a Pigouvian correction in a first-best case where the
tax/subsidy can be varied at each instant. The first-best path is
then contrasted with the second-best path for the stock
externality and emissions when an inflexible policy is used. The
optimal timing of the inflexible policy is also examined. A
deferment of the fixed one-time correction may sometimes be
desirable when the initial state of the stick is less deteriorated
than the frist-best steady state. Transaction costs are shown to
augment deferral time. When, however, the initial state is more
deteriorated than the frist-best steady state, a deferment is
never desirable.