The non-differentiability and implicit definition of boundary of production possibility set (PPS) in data envelopment analysis (DEA) are two important difficulties for obtaining directional characteristics, including different elasticity measures and marginal rates of substitution. Also, imposing weight restrictions in DEA models have some shortcomings and misunderstandings. In this paper we ut...

This paper develops a simple but general methodology to estimate the expected intertemporal marginal rate of substitution or “EMRS”, using only data on asset prices and returns. Our empirical strategy is general, and allows the EMRS to vary arbitrarily over time. A novel feature of our technique is that it relies upon exploiting idiosyncratic risk, since theory dictates that idiosyncratic shock...

the non-differentiability and implicit definition of boundary of production possibility set (pps) in data envelopment analysis (dea) are two important difficulties for obtaining directional characteristics, including different elasticity measures and marginal rates of substitution. also, imposing weight restrictions in dea models have some shortcomings and misunderstandings. in this paper we ut...

This paper analyzes conservation and extinction of renewable resources when the production function is nonconcave and the return function depends on consumption and the resource stock. The paper focuses on the efficiency of global conservation, a safe standard of conservation, and extinction. Which outcome obtains depends on the marginal rate of substitution between investment and the stock in ...

In a discounted one-sector convex model of optimal economic growth where utility may depend on both consumption and capital stock, I derive necessary and sufficient conditions for sustained growth (unbounded expansion of capital and consumption). Conditions for bounded growth and extinction are also outlined. Optimal paths may be non-monotone. Sustained growth may occur even though the asymptot...

Arguments about the appropriate discount rate often start by assuming a Utilitarian social welfare function with isoelastic utility, in which the consumption discount rate is a function of the (constant) elasticity of marginal utility along with the (much discussed) utility discount rate. In this model, the elasticity of marginal utility simultaneously reflects preferences for intertemporal sub...

This paper applies a new methodology to estimate the expected intertemporal marginal rate of substitution or “EMRS”, using only data on asset prices and returns. A novel feature of the technique is that it relies upon exploiting idiosyncratic risk, since theory dictates that idiosyncratic shocks earn the EMRS. I apply the methodology to two different data sets: monthly data from 1994 through 20...