KDI 한국개발연구원

법경제

Working Paper

Controlling Stock Externalities : Flexible versus Inflexible Pigouvian Corrections

페이스북

저자 고일동(高日東)
발행일 1989/08/01
시리즈 번호 8923

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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.