The Analysis of the Effects of Environmental Tax Reform and Government Structure on Economic Growth and Welfare: A General Equilibrium Approach

Document Type : Research Paper


1 Assistant Professor of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran

2 Associate Professor of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran

3 MA Student in Economics, Faculty of Economics and Political Sciences, Shahid Beheshti Universit, Tehran, Iran


the main goal of economic growth and development plans in each country is to increase the standard of life and the welfare of the community ,but at the same time, economic activities through the spread of pollution have a negative effect on the welfare. Therefore, the exertion of environmental taxes, through control of pollution and reduction of the tax burden on production factors, along with a change in the structure of government expenditures, affects economic growth and welfare Accordingly. In this paper, by generalizing the Lucas model, the effects of environmental tax reform and the structure of government expenditures on economic growth and welfare, in the framework of general equilibrium model are examined. The results of theoretical and empirical analysis indicate that tax reform policies, along with a change in the structure of government expenditures in favor of education and the prevention of pollution, affect the allocation of resources and welfare in the long term, but the extent of its effects on economic growth and welfare varies depending on the parameters of the model.
JEL Classification: H23, I38, C02


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Volume 54, Issue 4 - Serial Number 129
January 2020
Pages 821-846
  • Receive Date: 23 August 2018
  • Revise Date: 01 September 2019
  • Accept Date: 30 November 2019
  • First Publish Date: 22 December 2019