Given the current situation with the high price of oil (an average of $53 per barrel in 2005) and the risk of global warming, the European Union (EU) is reinforcing its objectives related to the production of biofuels: they should account for 5.75% of the overall fuel consumption by 2010 in...

In this paper, we investigate the macroeconomic response to exogenous shocks, namely natural disasters and stochastic productivity shocks. To do so, we make use of an endogenous business cycle model in which cyclical behavior arises from the investment–profit instability; the amplitude of this...

This paper finds that it is optimal to start a long-term emission-reduction strategy with significant short-term abatement investment, even if the optimal carbon price starts low and grows progressively over time. Moreover, optimal marginal abatement investment costs differ across sectors of the...

Economic evaluation of climate policy traditionally treats uncertainty by appealing to expected utility theory. Yet our knowledge of the impacts of climate policy may not be of sufficient quality to justify probabilistic beliefs. In such circumstances, it has been argued that the axioms of...

Our concern in this paper is to analyze the optimal long-run pricing policies of oil-exporting countries. These might be described briefly as the policies which best meet their objectives, subject to the various limitations imposed on them by the realities of world economic forces.

The paper studies a two-region economy , with two sectors and three factors of production : oil, capital and labor . The South exports oil in exchange for industrial goods from the North . There is a net capital inflow to the South . This equals the difference between its export revenues and...

Oil price behavior has changed dramatically in the last twenty years. These changes can be explained rather simply in terms of the delayed responses of supply and demand to prices, and in terms of changes in the rate of discovery of reserves. This analysis can be used to forecast possible future...

Although American business leaders do not like protectionism, more and more of them are concluding that too many countries are stacking the deck against American competitors. The severe recession of 1980-83 and its lingering effects in certain regions and business sectors; unemployment stuck at...

We consider an economy which imports energy from a monopolistic price-setter. The domestic general equilibrium of this economy adjusts in response to the price of energy. We define the total cross price elasticity of demand between energy and capital as the cross price elasticity across general...

This paper reviews a range of issues relating to tradable carbon dioxide quotas. It considers the economic principles on which they are based, compares them with alternative carbon abatement policies, and reviews many aspects of how tradable quotas would be implemented in practice.