This paper provides a formal framework to analyse informational and commitment requirements of several intertemporal price and quantity instruments for mitigating global warming. We ask under what conditions and to what extend the regulator can shift the complex and daunting intertemporal optimization of fossil resource use to markets. Mitigation always generates an intertemporal climate rent w...

Debt and currency crises are closely interlinked through the government’s intertemporal budget constraint. The default tax and the inflation/devaluation tax can be considered as alternative means of financing. Our empirical analysis finds that high-debt countries choose default rather than inflation/devaluation for financing, while a high money stock reduces the probability of debt crises. Furt...

Abstract Intertemporal choices are affected by both discount rate and utility curvature. We investigate how the two aspects of time preference size total budget using an intertemporal allocation task. At aggregate level as well at individual level, we find magnitude effects on substitutability (i.e., curvature). Individuals more patient when dealing with larger budgets also regard to be fungibl...

Abstract_______________________________________________________________________ The literature concerning the U.S. federal deficit and its implications for the federal government's intertemporal budget constraint seems to have reached a tentative conclusion that starting with the Reagan administration the U.S. federal government has violated its intertemporal budget constraint. Recently the pop...

This thesis collects three interrelated chapters of empirical work, which are connected to each other in the sense of testing UK fiscal policy. The first chapter investigates whether the UK fiscal policy was consistent with an intertemporal budget constraint for a long period of time from 1955 to 2006. I find evidence of sustainability with three structural breaks, respectively occurring in the...

Nominal government debt, including the monetary base, is a residual claim to government surpluses. Thus, the value of Þat money can be determined in a completely frictionless economy, just like the price of stock. The main theoretical objection to this Þscal theory of the price level is that it mistreats the government’s intertemporal budget constraint. I show that the valuation equation for no...

When an intertemporal optimization problem over a time interval [t0, T ] is linear and can be solved via dynamic programming, the Bellman’s principle holds, and the optimal control map has the desirable feature of being tail-optimal in the right queue; moreover, the optimizer keeps solving the same problem at any time time t with renovated conditions: we will say that he is preferences-consiste...