(S,s) Inventory Policies in General Equilibrium

Inventory Accelerator in General Equilibrium

We develop a general-equilibrium model of inventories with explicit micro-foundations by embedding the production-cost-smoothing motive (e.g., Eichenbaum, AER 1989) into an otherwise standard DSGE model. We show that …rms facing idiosyncratic cost shocks have incentives to bunch production and smooth sales by carrying inventories. The optimal inventory target of a …rm is derived explicitly. The...

General Equilibrium Rebound from Energy Efficiency Policies ∗

I study the general equilibrium implications of large-scale policies to improve energy efficiency, which are being implemented around the world to mitigate climate change. Energy efficiency policies “rebound” when economic responses undercut their direct energy savings. I develop an analytic general equilibrium framework that allows improvements in energy efficiency to affect output prices and ...

Modeling Biofuels Policies in General Equilibrium: Insights, Pitfalls and Opportunities

Over the past decade, biofuels production in the EU and US has boomed – much of this due to government mandates and subsidies. The US has now surpassed Brazil as the world’s leading producer of ethanol. The economic and environmental impact of these biofuel programs has become an important question of public policy. Due to the complex intersectoral linkages between biofuels and crops, livestock...

Property Markets and Policies in an Intertemporal General Equilibrium Model

A General Equilibrium Model of Age-Specific Employment Policies∗

Many countries around the world are simultaneously experiencing an aging labor force, sharp reductions in the labor force participation rates of older workers, and high unemployment among younger workers. In response, some governments have encouraged early retirement by the elderly to free up jobs for the young, while others have adopted policies that promote old-age labor force participation. ...