The current extensive literature on irreversible investment decisions usually makes the assumption of constant interest rate. In this paper we study the impact of interest rate and revenue variability on the decision to carry out an irreversible investment project. Given the generality of the...

This paper studies a revenue-neutral green tax reform that substitutes energy for wage taxes in an open economy with unemployment. As long as the labour tax rate exceeds the energy tax rate, such a reform will increase employment, reduce the domestic firms' unit cost of production and hence...

We use the Hartman rotation model to study behavioral and social welfare effects of forest tax progression. The following new results are shown for harvest and timber taxes. First, a tax-revenue neutral increase in the timber tax rate, compensated by a higher tax exemption, will shorten the...

This paper analyzes the socially optimal forest taxation in the rotation framework when the government has a binding tax revenue requirement. In the Faustmann model the optimal design of taxation consists of non-distortionary taxes, such as site productivity tax, site value tax or profit tax. A...

We incorporate a renewable resource into an overlapping generations model without capital and with quasi-linear preferences. Besides being an input for production the resource serves as a store of value. We characterize the dynamics, efficiency and stability of the steady state equilibria. The...