In this paper we solve a stochastic dynamic programming problem for the solution to a dynamic game in which the players select a mean level of control. The state transition dynamics are a function of the current state of the system and a multiplicative noise factor on the control variables of...

We use the Brock's (1982) asset pricing model to explore the equity premium puzzle that was raised by Mehra and Prescott (1985). In this paper, we have two basic points to make. First, there are parameterizations of the Brock model that have equity premia that are (1) more consistent with...

"Cost-benefit analysis (CBA) is controversial for environmental issues, but is nevertheless employed by many governments and private organizations for making environmental decisions. Controversy centers on the practice of economic discounting in CBA for decisions that have substantial long-term...

This paper contributes to the policy evaluation literature by developing new strategies to study alternative policy rules. We compare optimal rules to simple rules within canonical monetary policy models. In our context, an optimal rule represents the solution to an intertemporal optimization...