The impact of money supply on the real variables and on utility is an important question in monetary economics. Most previous works study this impact in representative agent economies, often under perfect foresight. With such a framework, however, the use of fiat money as a medium of exchange...

We consider a simple dynamic model of environmental taxation that exhibits time inconsistency. There are two categories of firms, Believers, who take the tax announcements made by the Regulator to face value, and Non-Believers, who perfectly anticipate the Regulator's decisions, albeit at a...

This paper presents a simple repeated-game model of interaction between the government and the private sector where, at each repetition, the government first makes a non-binding announcement about its future actions. The private sector, unsure whether or not this announcement will be respected,...

A wealth of literature, reviewed in the first section of this paper, is concerned with the occurence of multiple equilibria in economic optimization models and with the resulting history dependence of optimal solutions. Typically, the existence of multiple equilibria is associated with market...

The conference of Kyoto 1997 instutionalized a new and important economic instrument for environmental protection, the Joint Implementation Progran (JI). The concept of Joint Implementation involves a bilateral or multilateral deal in which countries facing high pollution abatment costs invest...

This paper investigates the influence of clean-up subsidies on the dynamics of models of production-environment interaction in continuous time. We show that complex dynamics can arise in the cases of socially optimal and decentralised solutions. Thus, it is possible that pollution can increase...

We consider a continuous-time version of Ireland's Neo-Keynesian reinterpretation of the seminal Kydland-Prescott model, assuming now an heterogenous private sector. In each period, a fraction of the private agents naively believes the policy announcements made by the government. The other...