Governing for Genuine Profit

Business corporations seek profit. That is, after subtracting cost, they maximize net revenue. Spillovers (both costs and benefits) involve trade-offs governing boards should make. Spillovers, especially when coupled with clumsy applications of discounted present value, distort a business' perception of profit. Today, businesses are buffeted by the old risks of recession and the new risks of terrorism. If modern society is to survive, then the seeds of terrorism and their fruit of tremendous loss must be contained. Accordingly, governing boards must propel businesses towards a paradigm of genuine profit. Governing boards must insist that their businesses prospect for positive feedback loops and implement a sustainable profit stream. In short, governing boards must insist that business be entrepreneurial.http://deepblue.lib.umich.edu/bitstream/2027.42/39918/3/wp533.pd

The optimal accumulation of human capital over the life cycle / BEBR No.553

Includes bibliographical references (p. 28)."This paper summarizes the important contributions of the new life cycle human capital literature and demonstrates that many of these results can be derived more simply than in their original presentations. Within three period discrete-time framework it is demonstrated how the optimal pattern of human capital investment over the life cycle depends upon the choice of the objective function, the life cycle of leisure, and the extent of nonmarket benefits of human capital. The paper offers sufficient conditions for the optimality of a profile of monotonically declining investment activity over the life cycle.

Governing for Genuine Profit

Business corporations seek profit. That is, after subtracting cost, they maximize net revenue. Spillovers (both costs and benefits) involve trade-offs governing boards should make. Spillovers, especially when coupled with clumsy applications of discounted present value, distort a business' perception of profit. Today, businesses are buffeted by the old risks of recession and the new risks of terrorism. If modern society is to survive, then the seeds of terrorism and their fruit of tremendous loss must be contained. Accordingly, governing boards must propel businesses towards a paradigm of genuine profit. Governing boards must insist that their businesses prospect for positive feedback loops and implement a sustainable profit stream. In short, governing boards must insist that business be entrepreneurial.Uncertainty, Corporate Governance, Corporate Law, Managerial Discretion, Social Responsibility

Loss Aversion in Water Markets

Resource /Energy Economics and Policy,

Household Composition and Savings: An Overview

In recent years the literature on household saving behavior has been enriched by a number of contributions focusing on the problem of modelling a household as a single decision unit. It has reasonably been argued that with respect to household consumption and saving behavior the simple approach of modelling households as one representative decider could involve major mistakes. Thus the literature has enriched the basic model by incorporating variables that describe the composition of a household examples being the number and age of children, household member’s life expectancies and the intrahousehold distribution of income. This paper reviews these developments and empirical results in the latest literature, with a particular focus on intra-household income distributions.

Household Composition and Savings: An Overview

In recent years the literature on household saving behavior has been enriched by a number of contributions focusing on the problem of modeling a household as a single decision unit. It has reasonably been argued that with respect to household consumption and saving behavior the simple approach of modeling households as one representative decider could involve major mistakes. Thus the literature has enriched the basic model by incorporating variables that describe the composition of a household examples being the number and age of children, household member�s life expectancies and the intra-household distribution of income. This paper reviews these developments and empirical results in the latest literature, with a particular focus on intra-household income distributions.

The Option Value of Investments in Energy-Efficient and Renewable Energy Technologies

This paper takes up the need to engage in substantial investments in the energy producing capital stock to attack the climate change problem, caused by rising carbon dioxide concentrations in the atmosphere. However, the precise magnitudes of economic impacts of global warming as well as abatement and mitigation costs of climate change are not known and may be learned after time. Thus preferences to restrict or to loosen environmental objectives and related emission levels might change and are reflected in an uncertain “price” for environmental usage (e.g. emission tax, marketable permits). As a consequence investors face some uncertainty and need to take the option value of their investments in the energy producing capital stock into account and tend to delay their investment. Considering long usage periods and indivisibilities of power production investments adequate environmental policy has to be designed in a way to reduce uncertainty for investors.Climate Change, Option Value, Investment Uncertainty, Renewable Energy, Klimawandel, Optionswerte, Investitionsunsicherheit, Erneuerbare Energien