This paper studies implementation of the social optimum in a model of habit formation. We consider taxes that address inefciencies due to negative consumption externalities, imperfect competition, and self-control problems. Our contributions are to: i) account for producers market power; and ii)...

Consider a lump-sum pension fund problem, in which an agent deposits an amount with a fund manager up front and is later repaid a lump sum x(T) after time T. The fund manager may be both cautious in seeking a payoff x(T) meeting a certain target, but relaxed toward the possibility of exceeding...

Maintaining an open economy within certain bounds on inflation, output gap and exchange rate can help sustainable economic development. Macroeconomics proposes monetary-policy models that describe evolution of the above quantities. We use one such model, constituted by a four-metastate...