The problem of choosing second-best trade policies is modified by including sector-specific policies as well as tariffs. We obtain conditions under which reduction of the largest tariff is welfare improving. Formulae for the optimal tariff and sector-specific subsidy are used to study the design...

This note derives the dynamic programming equation (DPE) to a differentiable Markov Perfect equilibrium in a problem with non-constant discounting and general functional forms. We begin with a discrete stage model and take the limit as the length of the stage goes to 0 to obtain the DPE...

The problem addressed by this study is how a large urban water district can best respond to a drought or the prospect of a drought. Specifically, what is the least cost combination of alternatives to meet periodic shortages? A solution to this problem may involve structural approaches (such as...

We use a nonlinear, nonparametric method to forecast the unemployment rates. We compare these forecasts to several linear and nonlinear parametric methods based on the work of Montgomery et al. (1998) and Carruth et al. (1998). Our main result is that, due to the nonlin-earity in the data...

The strategic effects of subsidies on output and subsidies on investment differ substantially in dynamic models where a government's commitment ability is limited. Output subsidies remain effective even as the period of commitment vanishes, but investment subsidies may become completely...

Most environmentalists favor the reduction in CO2 emissions but oppose international trade in emissions permits Although economic theory provides a strong case in favor of trade in permits) there is little empirical evidence of the size of potential benefits. We estimate the benefits of this...