Rudy Colacicco's article in "Research in Economics"

Cover of REACH plus magazine, November 2020 issue

The research paper of Rudy Colacicco, Head of Socio-Economic Research at Eppa, was published in "Research in Economics" (Elsevier).

"Environment, Imperfect Competition, and Trade: Insights for Optimal Policy in General Equilibrium"

He builds a two-country general oligopolistic equilibrium model, in which sectors differ in emissions and technologies, and pollution can be transboundary. He derives the optimal bilateral environmental policy for the economy as a whole, for the cases in which the environmental damage either linearly or quadratically increases in total pollution. The analysis highlights that the optimal emission tax can even be negative, and bilateral trade liberalization should be matched with either a rise or a fall in the optimal emission tax. The moments of the emission distribution and technology distribution across sectors are fundamental to implement optimal environmental policies.

Your are welcome to read or download the article here.

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