Economics, Econometrics and Finance
a year ago

Pollution persistence and policy uncertainty drive firms to shift output.

Research Square (Research Square)
Measuring Regulatory Errors from Environmental Policy Uncertainty
Ana Espínola‐Arredondo, Félix Muñoz-García, Dolores Garrido

Paper Summary

The article explores how uncertainty in environmental policies can affect businesses. When pollution lingers, firms adjust their production based on the government's environmental stance. Ignoring pollution persistence and policy uncertainty can lead to inefficiencies.

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