In theory, a nation could build the full economic cost of externalities, be they positive or negative, into a wide range of transactions. Are there any comprehensive resources on the effects this would have, rooted in or citing the primary literature?

  • $\begingroup$ Feel free to edit this question to meet any standards economics.se has for reference requests, as I couldn't find a policy analogous to this. $\endgroup$
    – J.G.
    Commented Aug 7, 2020 at 20:07
  • $\begingroup$ I'm not sure what your first sentence means or why it might be true. $\endgroup$
    – user18
    Commented Aug 8, 2020 at 5:01
  • $\begingroup$ @KennyLJ The economic costs of externalities are often empirically computable, and can be incorporated via taxes if positive and subsidies if negative. $\endgroup$
    – J.G.
    Commented Aug 8, 2020 at 6:44
  • $\begingroup$ In light of the close vote seeking details/clarity, I'll clarify I'm interested in estimation of the first and second dividends from Pigovian taxes and subsidies that internalize non-pecuniary externalities. I welcome any identification of what else I need to say. $\endgroup$
    – J.G.
    Commented Aug 8, 2020 at 11:27
  • $\begingroup$ @J.G. there is a broad literature on externalities both theoretical and empirical but from your post I have no idea what you are actually looking for. In any econ 101 textbook you will find that piguvian taxes have the effect of equalizing social and private cost of an activity. Is that what you mean by 'effect' here? $\endgroup$
    – 1muflon1
    Commented Aug 8, 2020 at 19:11


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