I propose an estimation procedure that can accommodate fixed effects in the widely used proxy variable approach to estimating production functions. The proposed procedure allows unobserved productivity to have a permanent component in addition to a (nonlinear) Markov shock. In contrast to...

We show that inefficiencies from having separate markets to correct an environmental externality are significantly mitigated when firms participate in an integrated product market. Firms take into account the distribution of externality prices and reallocate output from markets with high prices...

We show that inefficiencies from having separate markets to correct an environmental externality are significantly mitigated when firms participate in an integrated product market. Firms take into account the distribution of externality prices and reallocate output from markets with high prices...