We study the role of expectations of naive agents in a general equilibrium version of the Ramsey model with quasi-hyperbolic discounting. When agents recognize others’ naivete, as strongly suggested by empirical evidence, they revise consumption paths, correctly anticipating prices in a...

This paper is concerned with the analysis of environmental tax reforms within the framework of a dynamic computable general equilibrium model. The main policy option to be considered consists of using the revenues from CO2 taxation to partially finance the pension system. It is shown that CO2...

We consider a neoclassical growth model with quasi-hyperbolic discounting under Kantian optimization: each temporal self acts in a way that they would like every future self to act. We introduce the notion of a Kantian policy as an outcome of Kantian optimization in a given class of policies. We...

Die Veränderung des Weltklimas infolge des anthropogen verstärkten Treibhauseffekts und die prognostizierten Finanzierungsnöte der Pensionsversicherungen geben Anlaß zu großer Sorge. Anhand eines angewandten Gleichgewichtsmodells werden Strategien zur Reduktion von CO2-Emissionen simuliert...

This paper investigates the impact of tax reforms on capital accumulation and welfare in both a model without habits (benchmark model) and a model with habits. In the benchmark model, the examined tax reforms generally lead to higher welfare. In contrast, in the model with habits the same tax...

This paper presents sufficient conditions for the existence of a unique and globally stable steady state equilibrium for OLG economies with production. The conditions impose separate requirements on the utility and production functions. Moreover, the conditions do not require assumptions...

This paper studies the designs of optimal tax programs in OLG economies when first, consumption of one household lowers (status) utility of others, and second, consumption harms the environment. Status seeking raises optimal consumption tax rates, and lowers optimal tax rates on capital income

The paper shows that two of the most common specifications of habits - the multiplicative specification and the subtractive specification - may easily come to opposite conclusions regarding household behavior. In response to an increase in the strength of habits, young households increase the...