We consider a decentralized equilibrium of a 1-region, global neoclassical growth model with non-renewable exhaustible resources and optimizing agents. The resource generates energy, which is essential for producing final output. Its use generates externalities by affecting the climate. The...

Market work per person is roughly 10 percent higher in the U.S. than in Sweden. However, if we include the work carried out in home production, the total amount of work differs by only 1%. I set up a model with home production and show that differences in policy - mainly taxes - can account for...

Recent research has been able to measure two forms of technical change---one (fossil) energy-saving and one saving on capital/labor. The results first show strong evidence for "directed technical change" in the sense that the total resources devoted to saving on the inputs responds endogenously...

Optimal taxes for Europe and the U.S. are derived in a realistically calibrated model where agents buy consumption goods and services, and use home capital and labor to produce household services. The optimal tax rate on services is substantially lower than the tax rate on goods. Specifically,...