Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192169 
Authors: 
Year of Publication: 
1996
Series/Report no.: 
Discussion Papers No. 185
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper analyses the non-environmental welfare costs of an environmental tax reform using a numerical intertemporal general equilibrium model for the Norwegian economy. The tax reform is revenue neutral such that an increase in the carbon tax rate is accompanied by a reduction in the payroll tax. By exploiting existing tax wedges in the labour market and between consumption and saving, the total non-environmental welfare effect of the tax reform is positive. The paper also analyses how imperfect price expectations for the investors in real capital influence the total welfare costs of the tax reform. The welfare effect is the same due to exploitation of initial distortions, but the transitional dynamics are quite different in the two paths.
Subjects: 
Dynamic general equilibrium analysis
Environmental tax reforms
Imperfect expectations.
JEL: 
C68
D58
D60
D90
H20
Q43
Document Type: 
Working Paper
Document Version: 
Digitized Version

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