Ethnicity, Interdependence, and the Investment Model of Commitment Processes

Pennsylvania is one of a number of U.S. states that provide incentives for the generation of electricity by solar energy through Solar Renewal Energy Credits (SRECs). This article develops a return on investment model for solar energy generation in the PJM (mid-Atlantic) region of the United States. Model results indicate that SREC values of roughly $150 are needed for residential scale systems to break even over a 25-year project period at 3% interest. Market prices for SRECs in Pennsylvania have been well below this range from late 2011 through the first half of 2016, indicating that previous capital investments in solar generation have been stranded as a result of steep declines in the value of SRECs. A simple conceptual supply and demand model is developed to explain the sharp decline in market prices for SRECs. Also discussed is a possible policy remedy that would add unsold SRECs in a given year to the SREC quota for the subsequent year.

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A Dynamic Investment Model with Profit-Sharing in an Interest-Free Economy

American Journal of Islam and Society ◽

10.35632/ajis.v8i1.2647 ◽

1991 ◽

Vol 8 (1) ◽

pp. 109-127

Author(s):

Zaidi Sattar

Keyword(s):

Optimal Investment ◽

Integrated Approach ◽

Building Blocks ◽

Profit Sharing ◽

Comparative Statics ◽

Investment Model ◽

Financial Contracts ◽

Endogenous Variables ◽

Rate Of Profit ◽

Component Models

The present paper is a contribution to the building blocks of an investmentmodel within the framework of an integrated macroeconomic model of anIslamic economy. Investment behavior in the model is guided by an Islamicethicalvalue system and profit-sharing financial contracts. The typical firm’sinvestment decision is believed to emerge from a dynamic inter-temporalmaximization exercise within an infinite time horizon. The method of Calculusof Variations is applied to arrive at the optimal investment and employmentcriteria for the firm. The result is then incorporated into a macroeconomicmodel to study the behavior of key endogenous variables like national incomeand the rate of profit-share. Comparative statics exercised within a generalequilibrium framework reveal the potency of monetary policy but the neutralityof fiscal policy with respect to output and employment.IntroductionThe past decade has witnessed a tremendous outpouring of interest aswell as effort in the formalization of economic models based on profit-sharingfinancial arrangements as an Islamic alternative to the conventional interestbasedeconomic system. Several macroeconomic models for interest-freeeconomies have been proposed (Anwar 1987; Habibi 1987; Metwally 1981& 1983). The rigor of an integrated approach to such macroeconomic modelhgdepends on the rigor of the component models, namely, the consumption,investment, monetary, and fiscal relationships. Economists have writtenextensively on different aspects of consumer behavior in Islamic societies.Kahf (1978) and Khan (1984), among others, have contributed to the conceptualand analytical formulation of the consumption function under ...

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A Numerical Method for a Continuous-Time Insurance-Consumption-Investment Model

SSRN Electronic Journal ◽

10.2139/ssrn.1911651 ◽

2009 ◽

Cited By ~ 1

Author(s):

Jinchun Ye

Keyword(s):

Numerical Method ◽

Continuous Time ◽

Investment Model ◽

Insurance Consumption

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A Model of Multinational Income Shifting and an Application to Tax Planning with E-Commerce

Journal of the American Taxation Association ◽

10.2308/atax-50817 ◽

2014 ◽

Vol 36 (2) ◽

pp. 27-53 ◽

Cited By ~ 18

Author(s):

Kenneth J. Klassen ◽

Stacie K. Laplante ◽

Carla Carnaghan

Keyword(s):

Tax Planning ◽

Investment Model ◽

Income Shifting ◽

Tax Rates ◽

Foreign Investments ◽

Effective Tax Rates ◽

Tax Rate ◽

Foreign Earnings ◽

Joint Consideration ◽

The U.S

ABSTRACT: This manuscript develops an investment model that incorporates the joint consideration of income shifting by multinational parents to or from a foreign subsidiary and the decision to repatriate or reinvest foreign earnings. The model demonstrates that, while there is always an incentive to shift income into the U.S. from high-foreign-tax-rate subsidiaries, income shifting out of the U.S. to low-tax-rate countries occurs only under certain conditions. The model explicitly shows how the firms' required rate of return for foreign investments affects both repatriation and income shifting decisions. We show how the model can be used to refine extant research. We then apply it to a novel setting—using e-commerce for tax planning. We find firms in manufacturing industries with high levels of e-commerce have economically significant lower cash effective tax rates. This effect is magnified for firms that are less likely to have taxable repatriations. JEL Classifications: G38, H25, H32, M41.

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The impact of credit rationing on farmer’s economic equilibrium

Agricultural Economics (Zemědělská ekonomika) ◽

10.17221/105/2009-agricecon ◽

2009 ◽

Vol 55 (No. 11) ◽

pp. 541-549 ◽

Cited By ~ 1

Author(s):

L. Čechura

Keyword(s):

Capital Accumulation ◽

Control Variable ◽

Credit Rationing ◽

Adjustment Costs ◽

Investment Model ◽

Economic Equilibrium ◽

Dynamic Investment ◽

Dynamic Optimization Model ◽

Investment Spending ◽

The Impact

The paper deals with the theoretical analysis of the impact of credit rationing on farmer’s economic equilibrium. The analysis is carried out based on the derived dynamic optimization model, which is the dynamic investment model with adjustment costs. The credit rationing is introduced by imposing an upper limit on the control variable, which is in this case represented by the investment spending. Then, the optimal control is used to solve the optimization problem in the situation of both with and without credit constraints. Finally, the situations without and with credit rationing are compared. The results show that the occurrence of credit rationing or in general financial constraints significantly determines the capital accumulation and investment decisions of farmers and as a result their supply functions.

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