We derive optimal input taxes to control stock pollution problems generated by heterogeneous agents. The taxes vary over time and in response to differences of asset quality and technology choice. We also derive second-best policies and compare them to the efficient policy and also among...

In this paper we present a classroom exercise where students can solve the basic two-period consumer choice model using the Excel-Solver, and explore the main features of the model. We also include a static comparative analysis and a borrowing constraint in the optimization problem