Related papers: General Equilibrium Theory for Climate Change
The Ricardian model of world trade based on comparative advantage is not sufficient to justify equal trade relations.The existing model of trade relations does not explain the distribution of income among trading countries. This paper…
A generalized continuous economic model is proposed for random markets. In this model, agents interact by pairs and exchange their money in a random way. A parameter controls the effectiveness of the transactions between the agents. We show…
This paper has two central aims: first, to provide simple conditions under which the generalized games in choice form and, consequently, the abstract economies, admit equilibrium; second, to study the solvability of several types of systems…
Geopolitics is shaped by trade and borders. We develop a general-equilibrium model in which both are endogenously determined in a linear world. Their interaction rationalizes geopolitical outcomes that cannot be obtained when either trade…
Decarbonizing electric grids is a crucial global endeavor in the pursuit of carbon neutrality. Taking carbon emissions from generation into account when pricing electricity usage is an essential way to achieve this goal. However, such…
We show that, with indivisible goods, the existence of competitive equilibrium fundamentally depends on agents' substitution effects, not their income effects. Our Equilibrium Existence Duality allows us to transport results on the…
The mitigation of climate change requires a fundamental transition of the energy system. Affordability, reliability and the reduction of greenhouse gas emissions constitute central but often conflicting targets for this energy transition.…
This paper explores the optimal policy for using an allocated carbon emission budget over time with the objective to maximize profit, by explicitly taking into account present-biased preferences of decision-makers, accounting for…
Stringent climate policy compatible with the targets of the 2015 Paris Agreement would pose a substantial fiscal challenge. Reducing carbon dioxide emissions by 95% or more by 2050 would raise 7% (1-17%) of GDP in carbon tax revenue, half…
We provide an exact solution to the ideal-gas-like models studied in econophysics to understand the microscopic origin of Pareto-law. In these class of models the key ingredient necessary for having a self-organized scale-free steady-state…
This paper proposes and analyzes a stationary equilibrium model for a competitive industry which endogenously determines the carbon price necessary to achieve a given emission target. In the model, firms are identified by their level of…
We analyze a monetary system of random money transfer on the basis of double entry bookkeeping. Without boundary conditions, we do not reach a price equilibrium and violate text-book formulas of economists quantity theory (MV=PQ). To match…
The Walras approach to equilibrium focuses on the existence of market prices at which the total demands for goods are matched by the total supplies. Trading activities that might identify such prices by bringing agents together as potential…
This paper revisits the classic instrument choice problem in a setting with consumption externalities, through the lens of robust mechanism design. A regulator can implement any incentive-compatible policy but is uncertain about how…
Boundary conditions may change the phase diagram of non-equilibrium statistical systems like the one-dimensional asymmetric simple exclusion process with and without particle number conservation. Using the quantum Hamiltonian approach, the…
The decarbonization of the power sector plays a pivotal role in economy-wide decarbonization to set the world on track to limit warming to 1.5{\deg}C by 2050. Carbon emission markets can play a significant role in this transition by putting…
We develop a financial market model in which a large population of firms chooses dynamic emission strategies under climate transition risk, interacting with both environmentally concerned and neutral investors. Firms face a trade-off…
For an infinite-horizon continuous-time optimal stopping problem under non-exponential discounting, we look for an optimal equilibrium, which generates larger values than any other equilibrium does on the entire state space. When the…
The optimal taxation of assets requires attention to two concerns: 1) the elasticity of the supply of assets and 2) the impact of taxing assets on distributional objectives. The most efficient way to attend to these two concerns is to tax…
We show that various types of equilibrium play an important part in the behaviour of the troposphere. In analogy to the electro-chemical potential (well-known in solid-state physics and electro-chemistry) a gravito-chemical potential and a…