In an investment contest for environmental policy, polluters and victims ofpollution invest in an increase of their marginal benefits of pollution and environmentalquality, respectively. These investments influence time-consistent environmental policy...

The interpretation of the correlation between cash flow and investment is highly controversial. Some argue that it is caused by financial constraints, others by the correlation between cash flow and investment opportunities that are not properly measured by Tobin’s Q...

We analyze the design of optimal environmental policy when environmentaldamage is uncertain and investments in abatement technologies are irreversible. Weassume that the investment in the new abatement technology can be used for twoperiods and that the true extent of environmental damage will...

Modelling infrastructure as an international public good in a two-country modelof trade where each country’s social planner behaves strategically, we showthat the equilibrium levels of infrastructure are sub-optimal from a globalperspective...