This note studies the stochastic stability of the standard AK growth model un- der uncertain output technology. Capital accumulation follows a stochastic lin- ear homogenous differential equation. It’s shown that exponential balanced paths, which characterize optimal trajectories in the...

In this paper, we analyze optimal foreign direct investment of a firm which operates in a duopolistic market. We characterize certain technology spillover threshold and show that for a speed of transfer below this threshold, there is a unique locally asymptotic stable steady state with a...

The debate regarding the economic effects of immigration has attracted renewed interest in European countries since the economic crisis. We provide an approximation for the labor market effects of immigrants in four European countries during the global economic crisis after briefly analyzing the...

We study the strategic behavior of two countries facing transboundary CO2 pollution under a differential game setting. In our model, the reduction of CO2 concentration occurs through the carbon capture and storage process, rather than through the adoption of cleaner technologies. Furthermore, we...

In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality....

The present study explores the strategic interactions of countries setting pollution abatement policies in a dynamic two-player game. To reach a common target of environmental quality, countries can choose to commit to a stream of pollution abate- ment right from the beginning of the game or...