The objective is to show that endogenous discounting models should use a felicity function constrained to a positive domain. A variety of articles use the Mangasarian or Arrow and Kurz condition as a sufficient condition for optimality, which restricts felicity to a negative domain. Since the...

Ecolabeling is a means of reducing the information gap between consumers and producers. We study the implication of ecolabeling a supposedly green good for a consumer's allocation of income between a dirty and the supposedly green good. In the model, the role of the ecolabel is to help product...

In this article we investigate the leverage cycle in Luxembourg?s banking sector using individual bank-level data for the period 2003 Q1 to 2010 Q1. We discuss the mechanics behind the leverage cycle in Luxembourg?s banks and show that these banks predominantly adjust leverage by changing both...

This paper analyzes the effects of weather anomalies on migration in sub-Saharan Africa. Theoretically, we show how weather anomalies induce rural-urban migration that subsequently triggers international migration. We distinguish two transmission channels, an amenity and an economic geography...

In this paper we study the impact of the Basel III liquidity regulations, namely the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR), on the bank lending channel in Luxembourg. For this aim we built, based on individual bank data, time series of the LCR and NSFR for a...

This article analyzes an economy where both nonrenewable resources and a costly energy resource are essential inputs in production. The extraction of the nonrenewable resources leads to emissions that increase the probability of a catastrophe. We find that, in contrast to the...

The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and...

We investigate the leverage cycle in Luxembourg’s banking sector using individual bank-level data for the period 2003 Q1–2010 Q1. One of our findings is that Luxembourg’s banks have a procyclical leverage. This procyclicality is not due to marking-to-market but because Luxembourg’s banks...

The results in this paper show that the level of aggregation used in a social welfare func- tion matters significantly for policy analysis. Using climate change as an example, it is shown that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining...