Lund (2002a) showed in a CAPM-type model how tax depreciation schedules affect required expected returns after taxes. Even without leverage higher tax rates implied lower betas when tax deductions were risk free. Here they are risky, and marginal investment is taxed together with inframarginal...

Traditionally the pre-tax cost of capital is a function of the interest rate and the tax system. However, uncertainty implies that the market's required return is no single interest rate, but depends on risk. Different tax systems split risk differently between firm and government. Thus the...

Lund (2002a) showed in a CAPM-type model how tax depreciation schedules affect required expected returns after taxes. Even without leverage higher tax rates implied lower betas when tax deductions were risk free. Here they are risky, and marginal investment is taxed together with inframarginal...

The real options tradition originally predicted a decreasing relationship between uncertainty and investment, through the positive effect of higher uncertainty on the trigger level for revenue relative to costs. An opposing effect on the probability of reaching the level has been identified,...

We explore the efficacy of price and quantity controls as environmental policy instruments in a stochastic setting in which agents are risk averse. We demonstrate that the assumption of risk aversion may improve the performance of a tax relative to that of a system of tradable quotas, and that...

We analyze how frictions in the labour market influence the accumulation of general human capital. We find that investments in human capital benefits future employers, and that this positive externality leads to under-investments in human capital, and possibly top multiple, Pareto rankable...

This paper lays out a simple open economy macromodel based on the recent literature on imperfect competition and equilibrium unemployment.

In recent years, the OECD has measured the structural rate of unemployment by an indicator called the Non-Accelerating Wage Rate of Unemployment. The NAWRU-indicator is an important element in the policy analysis of the OECD. The rise in the estimated NAWRUs is also taken as evidence that Nordic...

The regional unemployment elasticity of annual earnings for Non-OECD immigrants is found to be more than three times larger than for natives, using micro data covering all immigrants in Norway in 1990 and a random sample of natives. The decline in relative earnings of Non-OECD immigrants from...