The paper analyses how a tractable representation of productivity heterogeneity among firms modifies the standard Dixit-Stiglitz (DS) model of monopolistic competition. The properties of the asymmetric model are explored by comparative statics analysis. The equilibrium adjustments of industry...

Many economists maintain that environmental regulations hamper productivity growth. However, recently, an opposing view has gained advocates. Indeed, it has been suggested that the empirically detected inverse relationship between environmental regulations and productivity growth is an almost...

We use the Stock and Wise approximation of stochastic dynamic programming in order to identify the extent to which profitability can explain exit behavior. In our econometric model, heterogeneous firms engage in Bertrand (price) competition. Firms produce heterogeneous products, using labor,...

Mandelbrot (1961) proposed to apply the class of Pareto-Levy distributions - which belong to the Stable distributions - as a framework for modelling income distributions. He also presented theoretic arguments in favor of the Pareto-Levy distributions. In this paper we provide additional...

We develop an econometric model for firm exit, using stochastic dynamic programming (SDP) as a starting point. According to SDP, the value of an operating firm can be written as the sum of (i) the net present value of continuing production if the firm is committed to a future exit date, and (ii)...

This article discusses how different climate policy instruments such as CO2 taxes and renewable energy subsidies affect the profitability of fossil fuel production, given that a fixed global climate target shall be achieved in the long term. Within an intertemporal framework, the model analyses...

We examine estimation of a model of producer behavior in the presence of correlated measurement errors in the regressors. Scale economies and price-cost margins are estimated from a set of panel data for manufacturing plants. The paper presents a somewhat new model for estimation of these...

This paper develops aggregate relations for a matching market of heterogeneous suppliers and demanders. The point of departure is the analysis of two-sided matching found in Roth and Sotomayor (1990). Under particular assumptions about the distribution of preferences, the present paper derives...

This paper aims at clarifying the notion "overall distributive effect" of an income component or a policy proposal and moreover discusses various approaches for assessing the distributional impact of the components of total income. We pay particular attention to the problem of evaluating the...

A number of European countries changed their tax system in the early 1990s along the lines of the US tax reform act of 1986. After the reforms marginal tax rates were generally lower, and mortgage interest deductions less generous. At the same time a long period of house appreciation started in...