Economists have a good understanding of intra-economic interdependence and a mature methodology of modeling it. Ecologists focus on the complex and sensitive interactions of species in ecosystems. This paper's objective is to suggest a new micro-foundation of ecosystem analysis based on economic...

In their seminal paper on production, consumption and externalities (AER, 1969), Ayres and Kneese initiated a research program on comprehensive analysis and management of residuals and pollution based on two pillars: the study of the residuals-generating materials flow subject to the mass...

In an integrated economy-ecosystem model humans choose their land use and leave the residual land as habitat for three species forming a food chain. The size of habitat determines the diversity and abundance of species. That biodiversity generates, in turn, a flow of ecosystem services with...

In a multi-country general equilibrium economy with mobile capital and rigidwage unemployment, countries may differ in capital endowments, production technologies and rigid wages. Governments tax capital at the source to maximize national welfare. They account for tax base responses to their tax...

We study the incidence of carbon-reduction and green-energy promotion policies in a general equilibrium small open economy that depends on imports of fossil fuels. The focus is on mixed policies that are either price based (emissions taxes and producer price subsidies for green energy) or...

A small open economy produces a consumer good along with green and black energy and imports fossil fuel for black-energy production at an uncertain world market price. Efficient risk management requires curbing fuel consumption, and hence carbon emissions, when consumers are prudent. Moreover,...

We develop a model of education where individuals face educational risk. Successfully entering the skilled labor sector depends on individual effort in education and public resources, but educational risk still causes (income) inequality. We show that an optimal public policy consists of...

In this model of education, where individuals are exposed both to educational risk and to wage risk within the skilled sector, successful graduation depends both on individual effort to study and on public resources. We show that insuring the present risks is a dichotomic task: Wage risk is...

In a model with ex-ante homogenous households, earnings risk and a general earnings function, we derive the optimal linear labor tax rate and optimal linear education subsidies. The optimal income tax trades off social insurance against incentives to work and to invest in human capital....