We study a trade-off between economic and environmental indicators using a two-stage optimal control setting where the player can switch to a cleaner technology, that is environmentally “efficient”, but economically less productive. We provide an analytical characterization of the solution...

In this paper we compare a deterministic model and a Markov switching model to analyze the behavior of the US economy and the Federal Reserve. We examine both optimal and empirical monetary policies for the US Federal Reserve between 1960 and 2008. We compare the optimal monetary policy to the...

In this paper, we introduce adoption/gestation lags in some standard growth models with a vintage capital structure. The diffusion of innovations is not immediate, and this can be modeled using adoption lags. Adoption lags are specified according to Nelson and Phelps (1966), AER. In particular,...