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A NOTE ON ENVIRONMENT-DEPENDENT TIME PREFERENCES

Published online by Cambridge University Press:  16 April 2015

Hsun Chu ,
Ching-chong Lai  and
Chih-hsing Liao
Hsun Chu
Affiliation:
Tunghai University
Ching-chong Lai
Affiliation:
Institute of Economics, Academia Sinica, National Cheng Chi University, Institute of Economics, National Sun Yat-Sen University and Feng Chia University
Chih-hsing Liao*
Affiliation:
Chinese Culture University
*
Address correspondence to: Chih-hsing Liao, Department of Economics, Chinese Culture University, No. 55, Hwa-Kang Road, Yang-Ming-Shan, Taipei 11114, Taiwan; email: chihhsingliao@gmail.com.
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Abstract

In this paper we investigate the growth effect of environmental taxes when time preference is endogenously determined by environmental quality. We find that if people become more patient because of a cleaner environment, raising the environmental tax may reduce pollution and stimulate growth. Moreover, the Pigouvian principle may be inefficient in the presence of endogenous time preference.

Keywords

Endogenous Time PreferenceEndogenous GrowthPigouvian Tax
Type
Notes
Information
Macroeconomic Dynamics , Volume 20 , Issue 6 , September 2016 , pp. 1652 - 1667
Copyright
Copyright © Cambridge University Press 2015 

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