This paper develops a novel method to estimate production functions. Earlier papers rely on special assumptions about the functional form of production functions. Our approach efficiently estimates all parameters of any production functions with Hicks-neutral productivity without additional...

We examine the problem of optimal taxation in a dynamic economy with imperfectly competitive markets. We find that the optimal tax system will tend to provide subsidies for the purchase of capital goods to offset gaps between price and marginal cost. The average tax on capital income will be...

This essay examines the idea and potential of a computational approach to theory,' discusses methodological issues raised by such computational methods, and outlines the problems associated with the dissemination of computational methods and the exposition of computational results. We argue that...

We introduce a novel simulated certainty equivalent approximation (SCEQ) method for solving dynamic stochastic problems. Our examples show that this method only requires a desktop computer to solve high-dimensional finite- or infinite-horizon, stationary or nonstationary dynamic stochastic...

Recent developments in public finance in the analysis of dynamic government debt policies have emphasized effects on the distribution of real resources across generations. At the same time, macroeconomists have emphasized the importance of the length of the time horizon over which agents...

Recent advances in the examination of efficiency gains from dynamic tax reforms have used simulation models to isolate intragenerational and/or intergenerational effects. Important considerations having to do with uncertainty or capital market imperfections are frequently missing from such a...

Using constrained optimization, we develop a simple, efficient approach (applicable in both unconstrained and constrained maximum-likelihood estimation problems) to computing profile-likelihood confidence intervals. In contrast to Wald-type or score-based inference, the likelihood ratio...

We develop a dynamic model in which firms decide when and where to enter a growing market. We do not pre-specify the order of entry, allowing instead for the roles of leader and follower to be determined endogenously. We characterize the subgame perfect equilibrium of the dynamic game and show...

The productivity of the world's natural resources is critically dependent on a variety of highly uncertain factors, which obscure individual investors and governments that seek to make long-term, sometimes irreversible investments in their exploration and utilization. These dynamic...