The heterogeneity of the available physical capital with respect to productivity and emissionintensity is an important factor for policy design, especially in the presence of emissionrestrictions. In a vintage capital model, reducing pollution requires to change the capitalstructure through...

While stochastic volatility models improve on the option pricing error when compared to theBlack-Scholes-Merton model, mispricings remain. This paper uses mixed normalheteroskedasticity models to price options. Our model allows for significant negative skewnessand time varying higher order...

In this paper, we analyse competition among jurisdictions to attract firms through low taxes oncapital and/or high level of public goods, which enhance firms’ productivity. We assume that thecompeting jurisdictions are different in (population) size and that the mobility of capital is...

Many papers in the litterature have adopted the expected utility paradigm to analyze insurancedecisions. Insurance companies manage policies by growing, by adding independent risks.Even if adding risks generally ultimately decreases the probability of insolvency, the impacton the insurer's...

In this paper, we consider a décision-maker facing a financial risk flanked by a backgroundrisk, possibly non-financial, such as health or environmental risk. A decision has to be madeabout the amount of an investment (in the financial dimension) resulting in a future benefiteither in the same...

This paper evaluates the predictive power of different information sets for the European Central Bank(ECB) interest rate setting behavior. We employ an ordered probit model, i.e. a limited dependent variableframework, to take into account the discreteness displayed by policy rate changes. The...

A set of agents with possibly different waiting costs have to receive the same service one after theother. Efficiency requires to maximize total welfare. Equity requires to at least treat equal agentsequally. One must form a queue, set up monetary transfers to compensate agents having to...

Tax competition within the EU is fiercer than in the rest of the OECD with tax rates fallingrapidly. This paper analyzes tax responses of EU-15 countries to corporate tax changes in theEU-10 new member states as a function of their proximity to these new member states. Theaverage corporate tax...

This paper uses a unique micro-level data-set on Chinese firms to test for the existence of a"political-pecking order" in the allocation of credit. Our findings are threefold. Firstly, privateChinese firms are credit constrained while State-owned firms and foreign-owned firms inChina are not;...

For two independent principles of intergenerational equity, the implied discount rate equals the growthrate of real per-capita income, say 2%, thus falling right into the range suggested by the U.S. Office ofManagement and Budget. To prove this, we develop a simple tool to evaluate small policy...