We incorporate a renewable resource into an overlapping generations model with standard, well-behaved utility and constant returns production functions. Besides being a factor of production the resource serves as a store of value. We characterize dynamics, efficiency and stability of steady...

A three-stage game including investments, environmental quality provision and price competition is developed to study the impact of green technology investment (ecolabeling), in a duopoly model of vertical product differentiation. The firms’ incentives to invest in green technologies depend on...

According to conventional wisdom internationally mobile capital should not be taxed or should be taxed at a lower rate than labour. An important underlying assumption behind this view is that there are no market imperfections, in particular that labour markets clear competitively. At least for...

The current literature on optimal forest rotation makes the unrealistic assumption of constant interest rate though harvesting decisions of forest stands are typically subject to relatively long time horizons. We apply the single rotation framework to extend the existing studies to cover the...

The current extensive literature on irreversible investment decisions usually makes the assumption of constant interest rate. In this paper we study the impact of interest rate and revenue variability on the decision to carry out an irreversible investment project. Given the generality of the...

This paper analyzes the socially optimal forest taxation in the rotation framework when the government has a binding tax revenue requirement. In the Faustmann model the optimal design of taxation consists of non-distortionary taxes, such as site productivity tax, site value tax or profit tax. A...