() and Sören Blomquist
Thomas Aronsson: Department of Economics, Postal: Umeå University, SE-901 87 Umeå, Sweden
Sören Blomquist: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Abstract: This paper addresses transboundary environmental problems in the context of an optimal tax problem, when part of the labor force is mobile across countries. The policy instruments include both commodity taxation and nonlinear income taxation. We show how the tax policy in a noncooperative equilibrium differs from that corresponding to a cooperative equilibrium. The results also indicate how a 'global policy maker' must act in order to make the national policy makers replicate the cooperative equilibrium.
34 pages, October 15, 2000
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