Abstract
We contrast effects of taxing non-renewable resources with the effects of traditional capital taxes and investment subsidies in an endogenous growth model. In a simple framework we demonstrate that when non-renewable resources are a necessary input in the sector where growth is ultimately generated, interest income taxes and investment subsidies can no longer affect the long-run growth rate, whereas resource tax instruments are decisive for growth. The results stand out both against observations in the literature from the 1970's on non-renewable resources and taxation-observations which were not based on general equilibrium considerations-and against the general view in the newer literature on taxes and endogenous growth which ignores the role of non-renewable resources in the "growth engine"
| Original language | English |
|---|---|
| Journal | Journal of Environmental Economics and Management |
| Volume | 53 |
| Issue number | 1 |
| Pages (from-to) | 80-98 |
| ISSN | 0095-0696 |
| DOIs | |
| Publication status | Published - 2007 |
Keywords
- Faculty of Social Sciences
- non-renewable resources
- endogenous growth
- capital taxation
- carbon taxes
- climate change
- optimal taxation
