The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Taxes and Subsidies

  • J. de V. Graaff
Reference work entry


The taxes and subsidies with which we shall be concerned are the corrective or Pigovian ones that could in theory be used to bring marginal private costs or benefits more closely into alignment with marginal social ones. The need for alignment arises when externalities (whether economies or diseconomies), operating at the margin, cause a divergence.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. de V. Graaff
    • 1
  1. 1.