Double dividend analysis: First results of a general equilibrium model (GEM-E3) linking the EU-12 countries

Capros, Pantélis; Georgakopoulos, Panagiotis; Zografakis, Stavros; Proost, Stef; Regemorter, Denise Van; Conrad, Klaus; Schmidt, Tobias; Smeers, Yves; Michiels, E.

doi:10.1007/978-94-015-8652-8_8

Cited by 38 publications

(29 citation statements)

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“…Current short-comings and possible extensions and objectives of the on-going development of the GEM-E3 model relate to alternative market clearing mechanisms, disaggregated specification of the labor market in labor skills, the endogenous representation of technology evolution and the engineering representation of the energy system, to mention the most important issues (see Capros et al [1997], p. 67).…”

Section: Strengths and Weaknesses Of The Model Possible Extensionsmentioning

confidence: 99%

Empirical macro models under test. A comparative simulation study of the employment effects of a revenue neutral cut in social security contributions

et al. 2001

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In the paper we simulate a revenue-neutral cut in the social security contribution rate using five different types of macro-/ microeconomic models, namely two models based on time-series data where the labour market is modelled basically demand oriented, two models of the class of computable equilibrium models which are supply oriented and finally a firm specific model for international tax burden comparisons. Our primary interest is in the employment effects the models predict due to the cut in the contribution rate. It turns out that qualitatively all models considered predict an increase in employment three years after the cut. But the employment effects differ considerably in magnitude, which follows immediately from the different behavioral assumptions underlying the different models. ZusammenfassungIn dem Beitrag wird der Beschäftigungseffekt infolge einer aufkommensneutralen Senkung der Sozialversicherungsbeiträge simuliert. Zu diesem Zweck werden fünf unterschiedliche ökono-mische Modelle verwendet, namentlich zwei Modelle, die auf Zeitreihendaten aufbauen und in denen der Arbeitsmarkt überwiegend von der Nachfrageseite dominiert wird, zwei Modelle aus der Klasse der computable equilibrium models, die typischerweise angebotsorientiert sind, und ein mikroökonomisches, firmenspezifisches Steuerbelastungsvergleichsmodell. Alle Simulationsergebnisse der Modelle weisen auf einen, wenngleich teilweise kleinen, positiven Beschäfti-gungseffekt hin, der sich allerdings beträchtlich in seiner Größenordnung unterscheidet. Dies ist eine unmittelbare Folge aus den unterschiedlichen Verhaltensannahmen, die den einzelnen Modellen unterliegen.3

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Section: Strengths and Weaknesses Of The Model Possible Extensionsmentioning

confidence: 99%

Empirical macro models under test. A comparative simulation study of the employment effects of a revenue neutral cut in social security contributions

et al. 2001

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“…In the GEM-E3 model for the EU (Capros et al 1996) the demand for durables takes into account the demand for complementary goods bound to consumer durables.…”

Section: Empirical Results For a Cobb-douglas Cost Functionmentioning

confidence: 99%

Recycling of Eco-Taxes, Labor Market Effects and the True Cost of Labor: A CGE Analysis

Löschel

Conrad

2002

SSRN Journal

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Computable general equilibrium (CGE) modeling has provided a number of important insights about the interplay between environmental tax policy and the pre-existing tax system. In this paper, we emphasize that a labor market policy of recycling tax revenues from an environmental tax to lower employers' non-wage labor cost depends on how the costs of labor are modeled. We propose an approach, which combines neoclassical substitutability and fixed factor proportions. Our concept implies a user cost of labor which consists of the market price of labor plus the costs of inputs associated with the employment of a worker. We present simulation results based on a CO 2 tax and the recycling of its revenues to reduce the non-wage labor cost. One simulation is based on the market price of labor and the other on the user cost of labor. We found a double dividend under the first approach but not under the second one. JEL classification codes: D58, J30, Q25

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“…One of the most extensive general equilibrium study of the EDD hypothesis has been carried out using the GEM-E3 model for Europe (Capros, Georgakopoulos, Zografakis, Proost, van Regemorter, Conrad, Schmidt, Smeers, and Michiels, 1996). In a recent application (Conrad and Schmidt, 1997), it is shown that a fiscal policy using the revenue of a carbon tax (designed to lower CO 2 emissions by 10% in ten years) to cut social security contributions, even if implemented unilaterally, could produce an eventual increase of employment in Germany, for example, of 0.26%.…”

Section: General Equilibrium Modelsmentioning

confidence: 99%

The double dividend issue: modeling strategies and empirical findings

Bosello

Carraro

Galeotti³

2001

Envir. Dev. Econ.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract. This paper reviews recent developments in the study of the so-called "double dividend", i.e. the possibility of improving the environment and, at the same time, reducing the distortions of the tax system through revenue-neutral green taxes. Recent modeling advances are considered at both the theoretical and the empirical levels. In particular, we note that the most significant theoretical advances have been made in the direction of allowing for imperfectly competitive markets, especially the market for labor. At the same time, we argue that empirical work, particularly on the "employment double dividend", is still relatively scant and that much more needs to be done both in the direction of more realistic empirical models and of an extended sensitivity analysis of the main findings. Terms of use: Documents inOctober 1998. Keywords: Double Dividend, Environmental Fiscal Reform, Environmental Modeling. JEL Classification: H0, H2, H3.Paper presented at the Symposium on "Environment, Energy, Economy. A Sustainable Development", Toward the National Conference on Energy and Environment, Rome 12-13 October, 1998. 1 THE DOUBLE DIVIDEND ISSUE: MODELING STRATEGIES AND EMPIRICAL FINDINGS Non-Technical SummaryThis paper reviews recent developments in the study of the so-called "double dividend", i.e. the possibility of improving the environment and, at the same time, reducing the distortions of the tax system through revenue-neutral green taxes.Roughly speaking, the double dividend literature can be divided in two strands. A first group of contributions focuses upon the distortions of the tax system, before and after an environmental fiscal reform. The emphasis of this notion of double dividend, referred to as weak or strong double dividend, is typically on individual welfare, with less attention being paid to the specific modes in which the tax revenues are recycled and their consequences for the economy. A second crop of papers looks at the impact that recycled fiscal revenues can have on relevant macroeconomic variables, especially employment, output, or growth. The papers in this area are motivated by the persistently high levels of unemployment which have now afflicted Europe for a decade. This specific form of double dividend, where both emissions and unemployment are reduced by the fiscal reform, is usually named "employment double dividend". This paper aims at providing an updated review of the advances in the study of the double dividend issue. In ...

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Double dividend analysis: First results of a general equilibrium model (GEM-E3) linking the EU-12 countries

Cited by 38 publications

References 6 publications

Empirical macro models under test. A comparative simulation study of the employment effects of a revenue neutral cut in social security contributions

Empirical macro models under test. A comparative simulation study of the employment effects of a revenue neutral cut in social security contributions

Recycling of Eco-Taxes, Labor Market Effects and the True Cost of Labor: A CGE Analysis

The double dividend issue: modeling strategies and empirical findings

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