We consider dynamic optimization problems on one-dimensional state spaces. Under standard smoothness and convexity assumptions, the optimal solutions are characterized by an optimal policy function h mapping the state space into itself. There exists an extensive literature on the relation...

Empirical studies stress the significance of financing constraints in business investment. Especially high tech investment is likely to be affected by capital market imperfections. The reason is that their returns are highly uncertain so that it is difficult to get outside finance for this kind...

We study socially vs individually optimal life cycle allocations of consumption and health, when individual health care curbs own mortality but also has a spillover effect on other persons’ survival. Such spillovers arise, for instance, when health care activity at aggregate level triggers...