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The double dividend issue: modeling strategies and empirical findings

Published online by Cambridge University Press:  15 January 2001

FRANCESCO BOSELLO
Affiliation:
Fondazione ENI Enrico Mattei
CARLO CARRARO
Affiliation:
University of Venice and Fondazione ENI Enrico Mattei
MARZIO GALEOTTI
Affiliation:
Dipartimento di Scienze Economiche, Università di Bergamo, Piazza Rosate 2, I-24129 Bergamo, Italy. E-mail: [email protected]

Abstract

This paper reviews recent developments in the study of the so-called ‘double dividend’, i.e. the possibility of improving the environment and, at the same time, reducing the distortions of the tax system through revenue-neutral green taxes. The main goal of the analysis is to identify the relationship between the modeling strategy and the double dividend results. Recent modeling advances are considered at both the theoretical and the empirical levels. In particular, we note that the most significant theoretical advances have been made in the direction of allowing for imperfectly competitive markets, especially the market for labor. At the same time, we argue that empirical work, particularly on the ‘employment double dividend’, is still relatively scant and that much more needs to be done both in the direction of more realistic empirical models and of an extended sensitivity analysis of the main findings.

Type
Theory and Applications
Copyright
© 2001 Cambridge University Press

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Footnotes

Paper presented at the Symposium on ‘Environment, Energy, Economy. A Sustainable Development’, Rome, 12–13 October 1998. We would like to thank three anonymous referees whose comments and suggestions helped improving significantly the manuscript.