The conference of Kyoto 1997 instutionalized a new and important economic instrument for environmental protection, the Joint Implementation Progran (JI). The concept of Joint Implementation involves a bilateral or multilateral deal in which countries facing high pollution abatment costs invest...

Contemporary economics contains mainly two approaches for an explanation of fluctuations of economic activity indicators. The first approach expresses fluctuations as the expression of an environment that is fundamentally uncertain and subject to random external shocks. The second approach...

Indicators and their associated reference points are key elements of current fisheries management advice, as well as of the developing ecosystem approach to it, especially in the International Council for the Exploration of the Sea precautionary approach. However, although sustainable management...

In this paper we analyze dynamic incentives of a firm to invest in production facilities in a less developed country with lower wage costs and lower productivity. Foreign investment induces that, due to technological spillovers, productivity of local firms in the foreign country increases. Firms...

This paper presents a numerical nonlinear dynamic programming algorithm for solving so-called optimal learning or adaptive control problems. These are decision problems with unknown parameters where the decisionmaker updates beliefs by Bayes rule. The updating equations are nonlinear. As a...

We study optimal incentive contracts in a continuous time principal-agent setting with hidden actions. The agent, whose effort controls the output, has a concave utility function which is non-separable in wealth and monetary cost of effort. The principal is risk neutral and optimally selects the...

This paper provides an extension of McKean’s (1965) incomplete Fourier transform method to solve the two-factor partial differential equation for the price and early exercise surface of an American call option, in the case where the volatility of the underlying evolves randomly. The...

We study a dynamic general equilibrium model with production, in which a representative agent chooses an unobservable effort level. We cast the problem as a continuous time principal agent model. We study the problem of a central planner (the principal) choosing optimal allocations of...

This paper revisits the approximate aggregation result of Krusell and Smith (1998). For the stochastic growth model with inelastic labor supply and uninsurable shocks to employment, those authors found that the mean was sufficient to forecast future prices; since prices are known functions of...

In economic theory, there exist many important problems whose mathematical formulation is a function relating the current value of a certain state variable to its (accurately forecast) future value. The most widely studied class of such problems is the Overlapping generations (OLG) models in...