I’ve recently been doing a lot of analysis on pigouvian taxes, such as carbon taxes and pollution taxes for my work.
The tax rates in question are only increasing, accounting for inflation, over time (this is largely driven by policy goals reflecting increasing desire to reduce pollutants).
My question is, when will (if ever) only positive changes in a variable ever effect the analysis? For example, can I still correctly use and interpret OLS outputs when a variable has only positive changes?
Apologies if this is very basic or too vague.