Rodríguez, Eduardo A. - In: Latin American Journal of Economics-formerly Cuadernos … 48 (2011) 1, pp. 39-64
In this paper we study the properties of general equilibrium with default in economies with incomplete markets. It is noted that, in equilibrium, an agent makes two types of comparisons when deciding whether to participate in the credit market: as a lender and as a borrower. As a consequence,...