Wicksellian theory of forest rotation under interest rate variability

Article Abstract:

A framework to study the Wicksellian single rotation problem to cover the unexplored case of variable and stochastic interest rate is presented. A mathematical characterization of the optimal rotation policy and its value is determined. By abstracting from amenity valuation, a solvable model is provided when interest rate uncertainty as a mean reverting process and forest value as a geometric Brownian motion are specified.

Finland, Usage, Statistical methods

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Interest rate policy, debt, and indeterminacy with distortionary taxation

Article Abstract:

The balance between the budget proposed by the government and the interest rate setting by banks is analyzed using a sticky price model.

Budget, Budgets

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