Optimal climate policy is investigated in a Ramsey growth model of the global economy with exhaustible oil reserves, an infinitely elastic supply of renewables, stock‐dependent oil extraction costs, and convex climate damages. Four regimes can occur, depending on the initial social cost of oil...

Three factors of economic growth, i.e., physical capital accumulation, schooling, and learning by doing, are investigated. The special relationship between the first factor and the other two is modeled through adjustment costs in production experience accumulation whenever the production...

A standard model of intertemporal allocation (described by a technology set and a welfare function defined on consumption) can be reduced to one described by a technology set and a utility function defined on this set. The authors present an example to show that even when the welfare function is...

This paper shows that, in the domain of piecewise linear statutory income tax functions, the principle of equal sacrifice implies tax progressivity. The progressivity implication of the doctrine is, in fact, stronger: the equal sacrifice principle, in essence, characterizes marginal rate...

We study the underlying structure of the two-dimensional dynamical system generated by a class of dynamic optimization models that allow for intertemporal complementarity between adjacent periods, but preserve the time-additively separable framework of Ramsey models. Specifically, we identify...