Standard environmental economics prescribes policies which are optimal and implemented immediately. The paper argues that, in reality, environmental policy often deviates from the optimum and implementation is not deterministic but subject to major uncertainty and frequent change. We present a...

We study the impact of economic policy on the importance of history and expectations for the macroeconomic performance of an economy. In our model the energy mix is based on the conversion of heterogeneous energy sources. Markups over marginal costs are endogenous so that the marginal revenue...