Related papers: Do Distributional Concerns Justify Lower Environme…
There is, among the economist ecosystem, the idea of virtuous public spending as a form of promotion of economic growth. If we think on the way GDP is measured, it is not possible to get that conclusion because it becomes circular:…
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…
Cap-based regulations are widely used to address distributional disparities in matching markets, but their efficiency relative to alternative instruments such as subsidies remains poorly understood. This paper develops a framework for…
The focus on Renewable Energy Communities (REC) is fastly growing after the European Union (EU) has introduced a dedicated regulation in 2018. The idea of creating local groups of citizens, small- and medium-sized companies, and public…
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…
During the Great Recession, Democrats in the United States argued that government spending could be utilized to "grease the wheels" of the economy in order to create wealth and to increase employment; Republicans, on the other hand,…
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…
Designing tax policies that are effective in curbing tax evasion and maximize state revenues requires a rigorous understanding of taxpayer behavior. This work explores the problem of determining the strategy a self-interested, risk-averse…
To decarbonize the economy, many governments have set targets for the use of renewable energy sources. These are often formulated as relative shares of electricity demand or supply. Implementing respective constraints in energy models is a…
We analyze the problem of optimal reduction of the debt-to-GDP ratio in a stochastic control setting. The debt-to-GDP dynamics are modeled through a stochastic differential equation in which fiscal policy simultaneously affects both debt…
We consider the problem of optimal consumption from labor income and investment in a general incomplete semimartingale market. The economic agent cannot borrow against future income, so the total wealth is required to be positive at (all or…
We incorporate the behaviour of tax evasion into the standard two-dimensional Ising model and augment it by providing policy-makers with the opportunity to curb tax evasion via an appropriate enforcement mechanism. We discuss different…
When a distributed algorithm must be executed by strategic agents with misaligned interests, a social leader needs to introduce an appropriate tax/subsidy mechanism to incentivize agents to faithfully implement the intended algorithm so…
In complex environments, there are costs to both ignorance and perception. An organism needs to track fitness-relevant information about its world, but the more information it tracks, the more resources it must devote to memory and…
Humans have developed considerable machinery used at scale to create policies and to distribute incentives, yet we are forever seeking ways in which to improve upon these, our institutions. Especially when funding is limited, it is…
This paper investigates a robust optimal consumption, investment, and reinsurance problem for an insurer with Epstein-Zin recursive preferences operating under model uncertainty. The insurer's surplus follows the diffusion approximation of…
We take an axiomatic approach to study redistribution problems when agents report income and needs. We formalize axioms reflecting ethical and operational principles such as additivity, impartiality and individual rationality. Different…
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…
Recessions are periods in which the least productive firms in the economy exit, and as the economy recovers, they are replaced by new and more productive entrants. These cleansing effects improve the average firm productivity. At the same…
We study how market segmentation affects consumers when a monopolist can adjust both prices and product qualities across segments, engaging in second- and third-degree price discrimination simultaneously. We characterize the…