Mankiw on Pigovian taxes

January 14, 2012

I just found a nice piece by Greg Mankiw on Pigovian taxes: Smart Taxes: An Open Invitation to Join the Pigou Club. I think I’m a member.

The abstract is:

Many economists favor higher taxes on energy-related products such as gasoline, while the general public is more skeptical. This essay discusses various aspects of this policy debate. It focuses, in particular, on the use of these taxes to correct for various externalities—an idea advocated long ago by British economist Arthur Pigou.

Downloaded the paper here.