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Working Paper
External increasing returns, short-lived agents and long-lived waste
Actions that affect environmental quality both influence and respond to macroeconomic variables. Further, many environmental and macroeconomic consequences of current actions will have uncompensated effects that outlive the actors. This paper presents an overlapping-generations model of environmental externalities and capital accumulation: consumption of the old generates long-lived garbage as a by-product, while young agents invest in both capital and destruction of the existing garbage stock. The model also assumes external increasing returns: increases in the capital stock increase the ...
Journal Article
The 'big drink' a few swallows short
Journal Article
District natural resources still an economic factor
Working Paper
Time-varying oil price volatility and macroeconomic aggregates
We illustrate the theoretical relation among output, consumption, investment, and oil price volatility in a real business-cycle model. The model incorporates demand for oil by a firm, as an intermediate input, and by a household, used in conjunction with a durable good. We estimate a stochastic volatility process for the real price of oil over the period 1986?2011 and utilize the estimated process in a nonlinear approximation of the model. For realistic calibrations, an increase in oil price volatility produces a temporary decrease in durable spending, while precautionary savings motives lead ...
Journal Article
Noteworthy : Water rights
Journal Article
Dollars in the dirt : the economic value of living trees