Working Papers

• Optimal Carbon Taxes in DSGE Models under Distortionary Fiscal Policy, joint with Mehrab Kiarsi (Link to full text)

• Optimality of Environmental Policy Mixes in the Presence of More than One Externality and of Strategic Firms (Link to pdf file) Under review

Abstract: This paper studies the optimality of a committed policy mix of tax and subsidy to control pollution when firms are involved in abatement technology R&D that is subject to knowledge spillovers. Two different behavioral assumptions for the firms are examined: when firms are myopic, and when they are strategic, i.e., react to the policy mix strategically. The results suggest that a committed regulator can attain optimality if firms are myopic, but that, if firms react to the regulations strategically, optimality is attained only under some strict assumptions, and in general, firms may produce and/or invest less or more than the optimal levels depending on which indirect effect, tax or subsidy, is stronger.

• Food Security and Water Scarcity: A Theoretical Framework, Joint with R. Kidwingira and G. Zaccour

Abstract: We characterize the domestic production and imports of food by a country under two scenarios, namely: food security and welfare maximization, in a model with an exogenously given probability of occurrence of an embargo or other sources of supply disruption on the international grain market, e.g., a natural catastrophe. In our framework, food security means relying on domestic production and considering imports only if available water is not enough to ensure enough food to citizens. We compare the volume of expected water used in domestic production, expected level of imports, as well as the expected welfare under these different scenarios. By doing so, we provide a measure to the cost of a food security policy.