The paper considers a model with two goods: a private good and an ??environmental?? good. The analysis has two basic ingredients: the two goods are imperfectly substitutable and the long run characteristics of substitution are uncertain. An ecological discount rate is defined. It is argued that...

This is the text of the ?Jean-Jacques Laffont lecture?, closing the 2010 Congress of the afse, ?Association Française de Science Économique?. The first part comes back on the standard economic viewpoint on expectational coordination, a viewpoint that the recent events have challenged. The...