How should Europe react to the Inflation Reduction Act?
The Sound of Economics
00:00
Is There a Pigouvian Argument for Green Subsidies?
I think there's so many interesting facets of that question. We sometimes worry about subsidies in general, tilting the playing field. I do think this area is we might worry a little less about that given those externality issues. The domestic content rules, on the other hand, I think there's very little argument for them. And maybe tax and carbon is first best, but if you can't get there, another way to benefit is to encourage the opposite of carbon.
Transcript
Play full episode
