We establish explicit socially optimal rules for an irreversible investment decision with time-to-build and uncertainty. Assuming a price sensitive demand function with a random intercept, we provide comparative statics and economic interpretations for three models of demand (arithmetic...

We study the problem of optimal investment in brown (carbon-intensive) production amid climate change and the impact of rising global temperatures. Our approach is based on a mean-field model of firms that produce goods whose productivity is adversely affected by temperature-related damages,...