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In this article we investigate the role that internal and external conflict plays for optimal climate and immigration policy. Reviewing the empirical literature, we put forward five theses regarding the link between climate change, migration, and conflict. Based on these theses, we then develop a theoretical model in which we take the perspective of the North who unilaterally chooses the number of immigrants from a pool of potential migrants that is endogenously determined by the extent of climate change. Accepting these migrants allows increases in local production which not only increases climate change but also gives rise to internal conflicts. In addition, those potential migrants that want to move due to climate change but that are not allowed to immigrate may induce external conflict. While we show that the external and internal conflict play a significant yet decisively different role, it is the co-existence of both conflicts that makes policy making difficult. Considering only one conflict induces significant immigration but no mitigation. Allowing for both types of conflict, then depending on parameters, either a steady state without immigration but with mitigation will be optimal, or a steady state with a larger number of immigrants but less mitigation. Furthermore, we find the possibility of Skiba points, signaling that optimal policy depends on initial conditions, too. During transition we examine the substitutability and complementarity between the mitigation and immigration policy.

This article analyzes the link between climate change and international migration. We use a two-country overlapping generations model with endogenous climate change, in which the production in the North generates climate change which negatively affects the productivity of the South. Our main findings are: (i) climate change will increase migration; (ii) small impacts of climate change have significant impacts on the number of migrants; (iv) a laxer immigration policy increases long- run migration, reduces climate change, increases North-South inequality if DRTS are significant; (v) a greener technology reduces long-run migration, provides a double- dividend in favor of the environment, reduces inequality if the migrants' impact to overall climate change is large. The preference over the policies thus depends on whether the policy maker targets inequality, wealth, the number of migrants or the environment, but the qualitative ranking between the policies does not change if the policies are costly.

We investigate the economic impact of stochastic endogenous extreme events and insurance in a growth model. Our analytical results and computational experiments show that i) transparency of the insurance sector is the decisive requisite for abatement activities, implying substantial policy opportunities; ii) we can fully characterize and quantify the impact of uncertainty on the social planner's decisions; iii) a decentralized economy will under-invest in abatement without adequate policy interventions; iv) precautionary beliefs on the frequency of extreme events lead to more sustainability; v) technical change does not change the ordering of the paths but leads to a more sustainable future; v) a social security system which prices insurance fairly is preferable to an insurance industry which provides insurance with an overhead.

We assess the impact of the existence of a costly energy substitute (like wind, solar) for a non-renewable resource (like oil, coal) on the sustainability of consumption. The prospects for sustainability depend crucially on the costs of this substitute. If one can reduce the costs of the resource substitute via learning-by-using then we find that still this does not guarantee sustainability. Also, the poorer a country the less it will take the learning-by-using effect into account and the more likely it will be unsustainable.

We show that the relationship between wealth and economic losses due to natural disasters is strongly linked to disaster risk. We first build an analytical model that demonstrates how countries that face a low hazard of disasters are likely to see first increasing losses and then decreasing ones with increasing economic development. At the same time, countries that face a high hazard of disasters are likely to experience first decreasing losses and then increasing ones with increasing economic development. We then use a cross country panel dataset in conjunction with a risk exposure index to investigate whether the data is consistent with the predictions from the model. As suggested by our model, we generally find an inverse ushaped link between losses and wealth for low and medium hazard countries, but a u-shaped relationship for high hazard countries.

In this article we extend the recent literature on overlapping generations and pollution by allowing each generation's utility to depend on past levels of pollution. To conform with the literature on habit in consumption we call this extension habit in pollution. Habit in pollution can visualize itself as either a concern for the flow of pollution only, or for the stock, or anything in between. We show that habit in pollution has not only significant consequences for the level of pollution and capital, but also for the evolution of utility over time. We observe that habit in pollution can lead to violations of two standard criteria of sustainability, which suggests that habit in pollution can be another source of intergenerational inequity.

In this article we extend the recent literature on overlapping generations and pollution by allowing each generation's utility to depend on past levels of pollution. To conform with the literature on habit in consumption we call this extension habit in pollution. Habit in pollution can visualize itself as either a concern for the flow of pollution only, or for the stock, or anything in between. We show that habit in pollution has not only significant consequences for the level of pollution and capital, but also for the evolution of utility over time. We observe that habit in pollution can lead to violations of two standard criteria of sustainability, which suggests that habit in pollution can be another source of intergenerational inequity.

The article gives new answers to the two following questions: One, what can be a potential source of the twin-peaks of economic growth? Two, why were some of the countries that were believed to belong to the group of low steady state countries (like Taiwan, South Korea, Japan, etc.) able to reach a convergence path which led them to a high steady state? We endogenize the time preference rate via a broad measure of wealth and provide empirical evidence that wealth affects the discount rate negatively. We provide sufficient conditions for multiplicity of equilibria and demonstrate how endogenous discounting via wealth leads to the twin-peaks of economic growth. We prove that improvements in technology can help avoid the Twin-Peaks.

This article considers an economy whose production function takes both renewable and non-renewable resources as inputs. We extend the current literature by allowing for exogenous technical change in the elasticity of substitution between these two types of resources. In addition, we study the consequences of biased technical change which alters the resources? relative productivities. We derive long-run asymptotic results, which we use to compare several cases. In the benchmark case of no technical change, our results are close to those obtained by Dasgupta and Heal (1974). In the case of technical change in the elasticity of substitution, we observe that this kind of technical change helps obtain positive long-run production despite the depletion of non-renewable resources. In the biased technical change case, longrun production is only possible either if non-renewable resources are non-essential or if biased technical change is quick enough to compensate for the decreasing flow of non-renewable resources. We embed our production function in an optimal growth model and study its dynamics. As a steady state (or a balanced growth path) is only attainable as time goes to infinity, we resort to numerical simulations to convey what is happening during the short and medium run. Our results provide new considerations for the debate on natural resources. We suggest that technical change should be directed to the resource which is most important for production.

We endogenize the discount rate via a broad measure of wealth and provide empirical evidence that wealth affects the discount rate negatively. We demonstrate that the Pontryagin conditions require positive felicity for intuitive results, whereas the concavity of the Hamiltonian requires negative felicity for optimality. This dilemma also holds for the endogenizations of Obstfeld (1990) and followers. We solve the model with positive felicity and resolve when optimality is possible. We discuss the impact on technological change, savings and convergence which are more in line with empirics. Finally, we discuss time consistency of a planner who cannot predict his preferences.

In this article we extend the recent literature on overlapping generations with a pollution sector by allowing generations to have a certain pollution perception with regards to the stock of pollution. Pollution perception, assumed to be part of the generations' preferences, can be either a concern for the flow of pollution only, or for the stock, or anything in between. We analyse the different steady states for their implications on intergenerational equity. Our main result is that if generations are only partly concerned with the actual stock of pollution, then periodic cycling will occur. We use the concept of Intergenerational Moral Intuition to analyse this periodic cycling. Our main policy conclusion is that decision makers who would like to achieve intergenerational equitable outcomes must either use the maximin criterion or take decisions spanning several generations in order to avoid the period cycling effect.