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Opportunities such as higher education can promote intergenerational mobility, leading individuals to achieve levels of socioeconomic status above that of their parents. We develop a dynamic model for allocating such opportunities in a…
We study the optimal financing and dividend distribution problem with restricted dividend rates in a diffusion type surplus model where the drift and volatility coefficients are general functions of the level of surplus and the external…
What is the best macroprudential regulation when households differ in their exposure to profits from the financial sector? To answer the question, I study a real business cycle model with household heterogeneity and market incompleteness.…
International taxation rules are outdated, allowing multinationals to shift profits to tax havens. This paper examines how tax reforms affect profit shifting and cross-country welfare. We propose a model that separates real economic profits…
We study an optimal dividend problem for an insurer who simultaneously controls investment weights in a financial market, liability ratio in the insurance business, and dividend payout rate. The insurer seeks an optimal strategy to maximize…
Climate change compels a reduction of greenhouse gas emissions, yet vehicular traffic still contributes significantly to the emission of air pollutants. Hence, in this paper we focus on the optimization of traffic flow while simultaneously…
Achieving net-zero carbon emissions requires a transformation of energy systems, industrial processes, and consumption patterns. In particular, a transition towards that goal involves a gradual reduction of excess carbon emissions that are…
We study an overlapping generations (OLG) exchange economy with an asset that yields dividends. First, we derive general conditions, based on exogenous parameters, that give rise to three distinct scenarios: (1) only bubbleless equilibria…
This paper investigates the role of a transmission system operator within a carbon footprint reduction strategy incorporating carbon taxes and renewable energy generation subsidies in the decentralised energy market. This is achieved via an…
In contemporary society, the effective utilization of public resources remains a subject of significant concern. A common issue arises from defectors seeking to obtain an excessive share of these resources for personal gain, potentially…
The paper starts with a brief review of present understanding of income distributions; especially with regard to recent work in the field of econophysics that draws parallels between income, wealth and energy distributions. Examples of…
This paper studies the income fluctuation problem with capital income risk (i.e., dispersion in the rate of return to wealth). Wealth returns and labor earnings are allowed to be serially correlated and mutually dependent. Rewards can be…
We analyze the implications of transboundary pollution externalities on environmental policymaking in a spatial and finite time horizon setting. We focus on a simple regional optimal pollution control problem in order to compare the global…
This study explored the association between sleep duration and redistribution preferences. Using an online survey, we propose a hypothetical situation in which the tax paid directly by respondents is redistributed to those earning less than…
Most decision theories, including expected utility theory, rank dependent utility theory and cumulative prospect theory, assume that investors are only interested in the distribution of returns and not in the states of the economy in which…
The aim of this paper is to formulate and study a stochastic model for the management of environmental assets in a geographical context where in each place the local authorities take their policy decisions maximizing their own welfare,…
The continued transition towards electric mobility will decrease energy tax revenues worldwide, which has substantial implications for government funds. At the same time, demand for transportation is ever increasing, which in turn increases…
A favorable population schedule for the entire potential human family is sought, under the overlapping generations framework, by treating population (or fertility) as a planning variable in a dynamical social welfare maximization context.…
In this paper we deal with the optimal bankruptcy problem for an agent who can optimally allocate her consumption rate, the amount of capital invested in the risky asset as well as her leisure time. In our framework, the agent is endowed by…
We characterize optimal policy in a multidimensional nonlinear taxation model with bunching. We develop an empirically relevant model with cognitive and manual skills, firm heterogeneity, and labor market sorting. We first derive two…