This paper evaluates optimal monetary policy rules within the context of a dynamic stochastic general equilibrium model estimated for the Euro Area. Under assumption of an ad hoc loss function for the central bank, we compute the unconditional losses both under discretion and commitment. We...

In this paper, we explore automobile fuel efficiency policies in the presence of two externalities i) a global environmental problem and ii) international innovation spillovers. Using a simple model with two regions, we show that both a fuel tax and a tax on vehicles based on their fuel economy...

Knowledge on the scale economies drives the incentives of regulators, governments and individual utilities to scale-up or scale-down the scale of operations. This paper considers the returns to scale (RTS) in non-convex frontier models. In particular, we evaluate RTS assumptions in a Free...

This paper studies the relationship between the stock market and the exchange rate in several countries. The approach taken in the first part of this study is a linear VAR, to be compared in the following part to a MSVAR. The data is also analyzed by Granger causality tests in both contexts and...

This model explicitly incorporates the dynamic aspects of conservation programs with incomplete compliance and it allows landholders’ behavior to change over time. A distinction is made between initial and continuing compliance. We find that incomplete and instrument-specific enforcement can...

We apply the set-up of limited commitment model to empirically test the role of informal risk-sharing networks using panel data on informal credit transactions from rural Ethiopia. The empirical estimates provide convincing evidence for the belief that enforcement problem limits the direct role...

In an environment of strongly decreasing banana productivity, we analyse whether an increase in the average productivity of a reference group a farmer belongs to, has a positive effect on that individual farmer’s harvest. The increase in average productivity is supposedly caused by the...

The high volatility of electricity markets gives producers and retailers an incentive to hedge their exposure to electricity prices by buying and selling derivatives. This paper studies how welfare and investment incentives are affected when markets for derivatives are introduced, and to what...

A regression estimator is said to be robust if it is still reliable in the presence of outliers. On the other hand, its standard error is said to be robust if it is still reliable when the regression errors are autocorrelated and/or heteroskedastic. This paper shows how robust standard errors...

This paper deals with the question: How can one incorporate modern responsibility-catering egalitarianism into the economic theory on the measurement of income inequality? We first concisely describe what is meant by responsibility-sensitive egalitarianism and present a particular axiomatic...