In December 2022, following Russia's invasion of Ukraine, a G7-led coalition of countries imposed a $60 per barrel price cap on the sales of Russian oil that use western services. This paper provides a theoretical and quantitative analysis of this new tool. We build a tractable equilibrium model...

Subsidies to consumers may cause firms to charge higher prices, which offsets consumer benefits from subsidies. We study a subsidy program design that mitigates such price increases by making products' eligibility for a subsidy dependent on firms' commitment to price ceilings. To quantify the...

The United States spends twice as much per person on pharmaceuticals as European countries, in large part because prices are much higher in the US. This fact has led policymakers to consider legislation for price controls. This paper assesses the effects of a US international reference pricing...

We analyze consequences of changing the terms of trade between agriculture and industry on capital accumulation and on welfare of workers in different sectors. The issue was central to Soviet industrialization debate and it remains important in today's developing world. Through a simple general...

This paper reviews the leading ideas that have emerged within two paradigms of price adjustment. Neither, it appears, provides a satisfactory theoretical scheme when taken in isolation. This paper concludes that an attempt to merge the more convincing elements of each is needed, and some...

There is widespread agreement among economists - and a diverse set of other policy analysts - that at least in the long run, an economy-wide carbon pricing system will be an essential element of any national policy that can achieve meaningful reductions of CO2 emissions cost-effectively in the...

Efficient electricity pricing involves two-part tariffs: a volumetric price equal to the marginal cost of producing an additional kilowatt hour (kWh) and a fixed fee to cover any remaining fixed costs. In this paper we explore how US electricity regulators depart from this simple two-part tariff...

Allowing emissions permits to be banked and borrowed over time can yield efficiency gains. I develop a model to demonstrate that banking and borrowing can also be allowed for a price policy. I compare expected welfare between price and quantity policies, with and without banking, under several...

A number of formerly regulated multiproduct industries have a transitional or permanent residual regulatory mandate to protect consumers from "excessive" prices. The legislation that deregulated most rail rates contains a statutory mandate for the regulator to protect shippers from "excessive"...

We give a thorough analytic characterization of a large class of sticky-price models where the firm's price setting behavior is described by a generalized hazard function. Such a function provides a tractable description of the firm's price setting behavior and allows for a vast variety of...