Pareto-improving environmental policies in an overlapping-generations model

Tetsuo Ono, Yasuo Maeda

Research output: Contribution to journalArticlepeer-review


This paper develops an overlapping-generations model with environmental externalities. In particular, we consider a situation where future generations are made worse off because of environmental degradation caused by the consumption of past generations. We show that there exists an allocation for which the welfare of both current and future generations is strictly increased, relative to a laissez-faire competitive equilibrium allocation. We then demonstrate that this allocation can be achieved by a tax-transfer scheme.

Original languageEnglish
Pages (from-to)211-225
Number of pages15
JournalJapanese Economic Review
Issue number2
Publication statusPublished - 2002
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics


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