In many developing and transition economies Mafia-like activities are rampant. Extortion and other forms of predation lower profitability in private businesses and distort investment incentives. Incorporated in a model of industrialization, bimodal club convergence may result. Economies may get...

n an infinite horizon optimal control problem, the Hamiltonian vanishes at the infinite horizon, when the differential equation is autonomous. The integrand in the integral criterion may contain the time explicitly, but it has to satisfy certain integrability conditions. A generalization of...

In most models of transboundary pollution, lack of international cooperation does not cause any inefficiency within each country. The paper shows that this result is only valid in the hypothetical case of no international trade. With international trade, we get a domestic inefficiency in...

We consider the Hartwick rule for capital accumulation and resource depletion, provide semantic clarifications and investigate whether this rule indicates sustainability and requires substitutability between manmade and natural capital. In addition to shedding light on the meaning of the...

We discuss the prevalence of pooling equilibria in a two-period model of an insurance market with asymmetric information. We solve the model numerically. In addition to reporting cases where a pooling equilibrium exists, we pay attention to why, in the case of non-existence of a pooling...

We analyze infinite-horizon choice functions within the setting of a simple linear technology. Time consistency and efficiency are characterized by stationary consumption and inheritance functions, as well as a transversality condition. In addition, we consider the equity axioms Suppes-Sen,...

In the negotiations towards an agreement to reduce greenhouse gas emissions, one of the issues negotiated will be the allocation of emissions (or tradable emission permits) between countries. In most analyses and policy discussions, it is usually taken for granted that each country would like...

Non-neutral taxation, and in particular imperfect loss offset, is shown to have a strong effect not only on investment decisions, but also on required expected after-tax rates of return to equity. Systematic risk is valued according to the CAPM, while non-linear taxes are valued by option...

We study climate policy when there are technological spillovers between countries, and there is no instrument that (directly) corrects for these externalities. Without an international climate agreement, the (non-cooperative) equilibrium depends on whether countries use tradable quotas or carbon...

The key to an understanding of the TV industry is the market for TV advertising. We present a model of this market that also encompasses the product markets and the viewer market. Because viewers dislike commercials, there is congestion in advertising, and TV channels offer complementary goods...