This paper attempts to clarify the connection between simple economic theory models and the approach of the Cointegrated Vector-Auto-Regressive model (CVAR). By considering (stylized) examples of simple static equilibrium models, it is illustrated in detail, how the theoretical model and its...

We consider a general equilibrium model where households operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the household and make it on their own or join another household. We study the...

Measures of health status, such as e.g. the QALY (Quality Adjusted Life Years) measure, have been proposed as a tool in the economic assessment of new medical technologies, and its possible foundations in individual utility theory have been discussed in the literature. However, the problems of...

The universal climate agreement is expected to be concluded in 2015 at 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris. Importantly, developing countries, who were not part of Kyoto Mechanisms, are expected to be part of new global regime in...

In this paper we study the dynamic general equilibrium path of an economy and the associated optimal growth path in a two-sector overlapping generation model with a stock pollutant. A sector (power generation) is polluting, and the other (final good) is not. Pollution is regulated by tradable...

The international asset pricing models are mostly developed in the case of parity failure (investors of different countries do not agree on the expected returns on securities). In this case, an equilibrium in the in- ternational asset markets may exist, but not in the international good markets....

This paper characterizes the out-of-equilibrium dynamics of a symmetric, pure exchange economy with two goods and N agents with uniformly distributed preferences and identical endowments. Relaxing the auctioneer assumption, but maintaining a global price rule, sequentially random pairwise...

I develop a model of competition between charter schools and traditional public schools and estimate the model using administrative data from North Carolina. The model allows peers to affect the production of student achievement. I use the model to quantify how existing charter schools have...

Economists have long argued that to increase households’ welfare, cash transfers are more efficient than commodities subsidies. However, not many studies address the indirect or economy-wide effect of such transfers especially in the context of poverty reduction programs in developing...

Empirical evidence suggests that both leisure time and medical care are important for maintaining health. We develop a general equilibrium macroeconomic model in which taxation is a key determinant of the composition of these two inputs in the endogenous accumulation of health capital. In our...