English, Article edition: Environmental policy, comparative advantage, and welfare for a developing economy BELADI, HAMID; CHAO, CHI-CHUR

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Bookmark: http://trove.nla.gov.au/version/179816
Physical Description
  • article
Language
  • English

Edition details

Title
  • Environmental policy, comparative advantage, and welfare for a developing economy
Author
  • BELADI, HAMID
  • CHAO, CHI-CHUR
Physical Description
  • article
Notes
  • This paper investigates the effects of pollution taxation for a dual developing economy with a separate abatement sector. Due to the real rigidity of the urban wage, pollution taxes raise the cost of the urban good and hence its relative price. This suggests that because of flexible rural wages, the developing economy tends to have a comparative advantage in the rural good which may be less polluting. Moreover, the higher price of the urban good worsens the urban unemployment ratio. The optimal tax on pollution is thus lower than the marginal environmental damage to the economy.
  • RePEc:cup:endeec:v:11:y:2006:i:05:p:559-568_00
Language
  • English
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