Quantifying Optimal Growth Policy

Optimal dividend policy and growth option

We analyse the interaction between dividend policy and investment decision in a growth opportunity of a liquidity constrained firm. This leads us to study a mixed singular control/optimal stopping problem for a diffusion that we solve quasi-explicitly establishing connections with two auxiliary optimal stopping problems. We characterize situations where it is optimal to postpone dividend distri...

Composition of Government Spending, Optimal Fiscal Policy, and Endogenous Growth in the Economy of Iran

This paper investigates the optimal fiscal policy, pertaining to government spending, considering different productivity of public services in production function and its impact on the optimal tax rate, the optimal rate of government spending, and optimal economic growth rate. Using the VECM model for Iranian economy over 48 years, results show while the current expenditure has a positive and s...

Optimal Fiscal Policy in a Stochastic Growth Model*

Although most neoclassical growth models focus on competitive equilibria which are Pareto optimal and ignore the role of government, recent works by Romer [28,29], Judd [20], Baxter and King [S], and Bizer and Judd [7] have shown that government can be introduced into and suboptimal equilibria can be studied in these models as well. Their studies, however, are positive analyses of the effects o...

Optimal Fiscal Policy With Oil Revenues

Climate Change Policy: Quantifying Uncertainties for Damages and Optimal Carbon Taxes

Controversy surrounds climate change policy analyses because of uncertainties in climatic effects, impacts, mitigation costs and their distributions. Here ∗This research was conducted while the author was at the Institute for International Studies, Stanford University.