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Now showing items 1-10 of 26
Risk and Return in Environmental Economics
(MIT CEEPR, 2012-07)
I examine the risk/return tradeoff for environmental investments, and its implications for policy choice. Consider a policy to reduce carbon emissions. To what extent does the value of such a policy depend on the expected ...
Volatility and commodity price dynamics
(MIT Center for Energy and Environmental Policy Research, 2001)
Commodity prices tend to be volatile, and volatility itself varies over time. changes in volatility can affect market variables by directly affecting the marginal value of storage, and by affecting a component of the total ...
Uncertain Outcomes and Climate Change Policy
(MIT Center for Energy and Environmental Policy Research, 2009-08)
Focusing on tail effects, I incorporate distributions for temperature change and its economic impact in an analysis of climate change policy. I estimate the fraction of consumption w_(_ ) that society would be willing to ...
Optimal timing problems in environmental economics
(MIT Center for Energy and Environmental Policy Research, 2001)
Because of the uncertainties and irreversibilities that are often inherent in environmental degradation, its prevention, and its economic consequences, environmental policy design can involve important problems of timing. ...
Uncertainty, investment, and industry evolution
(MIT Center for Energy and Environmental Policy Research, 1992)
We study the effects of aggregate and idiosyncratic uncertainty on the entry of firms, total investment, and prices in a competitive industry with irreversible investment. We first use standard dynamic programming methods ...
The present value model of rational commodity pricing
(MIT Center for Energy and Environmental Policy Research, 1991)
The present value model says that an asset's price equals the sum of current and future discounted expected future payoffs from ownership of the asset. I explore the limits of the present value model by testing its ability ...
Investments of uncertain cost
(MIT Center for Energy and Environmental Policy Research, 1992)
I study irreversible investment decisions when projects take time to complete, and are subject to two types of uncertainty over the cost of completion. The first is technical uncertainty, i.e., uncertainty over the amount ...
Inventories and the short-run dynamics of commodity prices
(MIT Center for Energy and Environmental Policy Research, 1990)
I examine the behavior of inventories and their role in the short-run dynamics of commodity production and price. Competitive producers of a storable commodity react to price changes by balancing costs of changing production ...
Expandability, reversibility, and optimal capacity choice
(MIT Center for Energy and Environmental Policy Research, 1997)
We develop continuous-time models of capacity choice when demand fluctuates stochastically, and the firm's opportunities to expand or contract are limited. Specifically, we consider costs of investing or disinvesting that ...
Irreversibility, uncertainty and investment
(MIT Center for Energy and Environmental Policy
Research, 1990)
Most investment expenditures have two
important characteristics. First, they are largely irreversible; the firm cannot disinvest,
so the expenditures are sunk costs. Second, they can be delayed, allowing ...