We analyze inefficiency and inequality associated with the use of creative capital to produce a final good in a regional economy. Specifically, we first study a case in which the individual creative capital units are perfect substitutes in the production of the final good. We show that the...

'The river Rhine, it is well known, Doth wash your city of Cologne; Butteil me, Nymphs, what power divine Shall henceforth wash the river Rhine?' The above strophe, composed by Samuel Taylor Coleridge early last century, shows that interest in environmental problems (in this case, the...