There is widespread concern that an international agreement on stringent climate policies will not be reached because it would imply too high costs for fast growing economies like China. To quantify these costs we develop a general equilibrium model with fully endogenous growth. The framework...

This paper examines the effects of knowledge diffusion on growth and costs of climate policy. We develop a general equilibrium model with endogenous growth which represents knowledge diffusion between sectors and regions. Knowledge diffusion depends on accessibility and absorptive capacity which...

This paper develops a decomposition algorithm by which a market economy with many households may be solved through the computation of equilibria for a sequence of representative agent economies. The paper examines local and global convergence properties of the sequential recalibration (SR)...

The relationship between our general equilibrium model with multi- member households and club models with multiple private goods is investigated. The main distinction in the definitions consists of the equilibrium concepts. As a rule, competitive equilibria among house- holds where no group of...

In this paper, we use a CGE model with endogenous growth to study the interplay between environmental regulation, innovation and sectoral growth. We find that a stringent reduction target for carbon emissions combined with a CO2-tax leads to structural changes. Under the assumption of a...

The paper investigates the long-run consequences of a phase-out of nuclear energy for the Swiss economy. We apply the CITE model, a CGE model with fully endogenous growth, and complement it with a bottom-up model. We find that the nuclear phase-out can be achieved at relatively low costs, even...

The paper proves the existence of equilibrium in nonrenewable resource markets when extraction costs are non-convex and resource storage is possible. Inventories flatten the consumption path and eliminate price jumps at the end of the extraction period. Market equilibrium becomes then possible,...

We study the consequences and optimal design of bank deposit insurance in a general equilibrium model. The model involves two production sectors. One sector is financed by issuing bonds to risk-averse households. Firms in the other sector are monitored and financed by banks. Households fund...