Starjournal Quotation Karp, Larry, Rezai, Armon. 2014. The Political Economy of Environmental Policy with Overlapping Generations. International Economic Review, 55 (3), 711-733.




A two-sector overlapping generations model illuminates the intergenerational effects of a tax that protects an envi- ronmental stock. A traded asset capitalizes the economic returns to future tax-induced environmental improvements, benefiting the current asset owners, the old generation. Absent a transfer, the tax harms the young generation by decreasing their real wage. Future generations benefit from the tax-induced improvement in environmental stock. The principal intergenerational conflict arising from the tax is between generations alive at the time society imposes the policy, not between generations alive at different times. A Pareto-improving tax can be implemented under various political economy settings.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Economic Review
Citation Index SSCI
WU Journalrating 2009 A+
Starjournal Y
Language English
Title The Political Economy of Environmental Policy with Overlapping Generations
Volume 55
Number 3
Year 2014
Page from 711
Page to 733
Reviewed? Y
Open Access N


Rezai, Armon (Details)
Karp, Larry (UC Berkeley, United States/USA)
Institute for Ecological Economics IN (Details)
Economics of Inequality FI (Details)
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