The author uses an investment model of oil development to show how a fiscal regime can be both neutral with respect to development decisions and efficient in recouping economic rents. The author finds that there is a unique rate for calculating the tax deductibility of capital costs which...

Using a variant of the Cagan (1956) model with rational expectations, this paper shows that expected stabilization can result in a budget deficit in excess of the maximum inflation tax. A cap on the deficit dampens inflation expectations and raises real balances, thus increasing the yield of the...

The theory of irreversible investment predicts that development of an oil field should take place when a unique 'price trigger' is passed. At the start of the 1990/91 Gulf War, however, oil prices promptly doubled, only to fall back to their previous level when peace returned six months later....

Recent empirical research has found evidence of hybrid dynamics for the real exchange rate. While there is a random walk near equilibrium, for real exchange rates some distance from equilibrium there is mean-reversion which increases with the degree of misalignment. An interesting question is...

In an analytically tractable model of the global economy, we calculate the Pareto improvement where a country experiencing a favourable supply side shock consumes more against expected future output and spreads the risk by selling shares. With capital inflows to finance the ‘New Economy’...

Large amounts of small-scale bioenergy projects were carried out in China's rural areas in light of its national renewable energy policies. These projects applied pyrolysis gasification as the main technology, which turns biomass waste at low costs into biogas. This paper selects seven bioenergy...

This paper investigates how unemployment persistence affects the optimal delegation of monetary policy to an independent central banker (CB). Two opposing forces are shown to be at work: with more persistence, the government's incentive to stabilize the economy is greater; but (if the CB is...

Is sovereign borrowing so different from corporate debt that there is no need for bankruptcy- style procedures to protect debtors? With the waiver of immunity, sovereign debtors who already face severe disruption from short-term creditors grabbing their currency reserves are also exposed to...