) precautionary savings and (ii) production externalities. By solving the Ramsey problem analytically along the entire transitional …

had posed a fundamental challenge to the received theory of externalities and of market failure generally …

competitive market may fail to produce a Pareto efficient outcome under the condition of changing technology. Price taking firms … social contribution of the technological or technical change, and thus the market fails. Firms with elastic labor demand will … a second best policy that corrects the market failure with a small dead weight loss. This policy does not require any …