The welfare state is generally viewed as either providing redistribution from rich to poor or as providing publicly-financed insurance. Both views are incomplete. Welfare policies provide both insurance and redistribution in varying amounts, depending on the design of the policy. We explore the...

Many countries are implementing or at least considering policies to counter increasingly certain negative impacts from climate change. An increasing amount of research has been devoted to the analysis of the costs of climate change and its mitigation, as well as to the design of policies, such...

We analyse environmental policy under asymmetric information in a context where a homepolluting firm, selling its final output solely in a foreign market with some market power, has an option to bypass domestic regulation through setting up new plants in a jurisdiction offering lenient...

Using aggregate quarterly data for the period 1975q1–2010q4, I find that the US housing market changed from a stable regime with prices determined by fundamentals, to a highly unstable regime at the beginning of the previous decade. My results indicate that these imbalances could have been...

This paper analyses the default option typical to American mortgages. House-holds borrow to buy durable housing, but future house prices are uncertain, and households find it advantageous to default on their debt if house prices fall suffi- ciently. A key assumption of the model is that...

The bulk of acid depositions, which have harmful effects on the environment, are caused by foreign emissions in many European countries. Therefore, if some countries emit more acids, one cannot be sure that countries that emit less will benefit from reduced acid depositions. However, numerical...

The materials balance principle points to the crucial role of material inputs in generating residuals in production processes. Pollution modelling must be of a multi-output nature. The most flexible transformation function in outputs and inputs used in textbooks is too general to make sense in...

Individuals with a preference for keeping moral obligations may dislike learning that voluntary contributions are socially valuable: Such informa- tion can trigger unpleasant feelings of cognitive dissonance. I show that if initial beliefs about the social value of contributions are sufficiently...