Bloise, Gaetano; Reichlin, Pietro - C.E.P.R. Discussion Papers - 2008
the economy. A sort of Cass Criterion (Cass (1972)) completely characterizes constrained inefficiency. This criterion … improvement, subject to participation, coincides with the introduced notion of constrained inefficiency. …In this paper, we consider economies with (possibly endogenous) solvency constraints under uncertainty. Constrained …