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A two‐sector overlapping generations model illuminates the intergenerational effects of a tax that protects an environmental stock. A traded asset capitalizes the economic returns to future tax‐induced environmental improvements, benefiting the current asset owners, the old generation....
Persistent link: https://www.econbiz.de/10011085386
The authors document an empirical puzzle for European Monetary System exchange rates during a period in which the bands on these exchanges rates were (almost) credible, i.e., exchange rate distributions are hump-shaped rather than U-shaped as predicted by the standard target zone model. The...
Persistent link: https://www.econbiz.de/10005550275
Even though all debt and wage contracts are indexed, there is an incentive to levy a surprise inflation tax as this erodes the real value of debt service, permits a cut in the tax rate, and boosts private consumption. With rules it is optimal to smooth tax and seigniorage revenues. However, with...
Persistent link: https://www.econbiz.de/10005550382
Persistent link: https://www.econbiz.de/10005230341
I analyze a power struggle where competing factions have "private" financial assets and deplete a "common" stock of natural resources with no private property rights. I obtain a feedback Nash equilibrium to the dynamic common-pool problem and obtain political variants of the Hotelling...
Persistent link: https://www.econbiz.de/10008670417