SIRE - DP - 2010 - 99 First - and second - best allocations under economic and environmental uncertainty
نویسندگان
چکیده
This paper uses a micro-founded DSGE model to compare second-best optimal environmental policy and the resulting allocation to first-best allocation. The focus is on the source and size of uncertainty, and how this affects optimal choices and the inferiority of second best vis-à-vis first best.
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