We propose a model to reconcile the theory of inter-temporal non-renewable resource depletion with well-known stylized facts concerning the exploitation of exhaustible resources such as oil. Our approach introduces geological constraints into a Hotelling type extraction-exploration model. We...

This paper analyses the political constraints of intergenerational risk sharing. The rst result is that the political process generally does not lead to ex ante optimal insurance. The second result is that in a second best political setting PAYG still contributes to intergenerational risk...

Abstract: In the tradition of Afriat (1967), Diewert (1973) and Varian (1982), we provide a revealed preference characterisation of the representative consumer. Our results are simple and complement those of Gorman (1953, 1961), Samuelson (1956) and others. They can also be applied to data very...

Abstract: As a result of the recent financial crisis and the ensuing economic recession, fiscal deficits have soared in many OECD countries. As a consequence, government debt has been on the rise again after a period of stable or declining government debt. In this paper we analyze debt...

Abstract: In this note we sketch a dynamic framework within which the discussion on the macro economic effects of climate change take place. The problem setting is characterized by scientific uncertainties about the development of climate, potential large economic losses and human beings having...

Results are reported of a laboratory experiment aimed at examining whether strategic substitutability and strategic complementarity have an impact on the tendency to cooperate in two-player dominancesolvable games with a Pareto-inefficient Nash equilibrium.We find that there is significantly...

In a simple model of resource depletion (isoelastic demand and constant unit extraction cost), we fully characterize the set of linear effiency-inducing tax/subsidy schemes. We show that this set is infinite and all the larger as the cost of extraction is low. Depending on the magnitude of the...

We consider a tax competition game between asymmetrically un-informed governments. Two governments simultaneously propose tax arrangements to attract a multinational firm (MNF) which has an ex-ante preference to operate in both countries, and governments anticipate that once the MNF accepts...