I study the dynamics of shiftwork when the demand for the output of the firm is stochastic and adjusting the number of shifts entails irreversible costs. The analysis reveals the existence of a gap between the level of demand that triggers activation of a shift and the level of demand that...

In a competitive industry where production entails a negative externality, a welfare-maximizing regulator considers, as control instruments, setting a cap on the industry output or levying an output tax. We embed this scenario within a dynamic setup where market demand is stochastic and market...

A typical model of investment under uncertainty where firms incur an irreversible cost in order to produce is studied with a novel focus on the reciever of this cost ("the source"). The source is modeled as a firm or a government that sells a resource or a right that are necessary for the...

Pennings (2000) has shown that the government can speed-up investment by subsidizing the potential investing firm's entry cost while taxing the future proceeds from the investment, so as to render the net expected value of its subsidy program zero. This note argues that while speeding-up the...

Rebelo's two-sector endogenous growth model is embedded within a two-country international trade framework. The two countries bargain over a trade agreement that specifies: (i) the size of the foreign aid that the richer country gives to the poorer one; (ii) the terms of the international trade...

The effect that investment lags have on the uncertainty-investment relationship is studied by modifying the Bar-Ilan and Strange (1996) model to enable an analytical solution. The following results emerge: (i) If the time lag is sufficiently small, uncertainty affects investment negatively; (ii)...

I study the dynamics of shiftwork when the demand for the output of the firm is stochastic and adjusting the number of shifts entails irreversible costs. The analysis reveals the existence of a gap between the level of demand that triggers activation of a shift and the level of demand that...

Since 1950, the quantity of working hours has been decreasing over time both in the U.S. and in the main European economies. The European economies have started this mutual decline process with longer working hours than in the U.S., but have ended it with less working hours than the U.S. This...