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Obiols-Homs, Francesc - Barcelona Graduate School of Economics (Barcelona GSE) - 2009

We study the effect of borrowing limits on welfare in several versions of exchange and production economies. There is a "quantity" effect of a larger borrowing limit which is beneficial for liquidity constrained agents, but essentially irrelevant otherwise. There is also a "price effect" which...

Persistent link: https://www.econbiz.de/10010547292

Incomplete Markets, Labor Supply and Capital Accumulation

Marcet, Albert; Obiols-Homs, Francesc; Weil, Philippe - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

We explore the accumulation of capital in the presence of limited insurance against idiosyncratic shocks, borrowing constraints and endogenous labor supply. In the exogenous labor supply case (e.g. Aiyagari 1994, Huggett 1997), the presence of limited insurance increases the demand for savings...

Persistent link: https://www.econbiz.de/10010547387

Search and Matching in the Labor Market without Unemployment Insurance

Obiols-Homs, Francesc - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

We study the effect of market incompleteness in a search model of the labor market in which the distribution of idiosyncratic uncertainty is determined endogenously. We show that costly search introduces a wealth effect at low levels of wealth such that poor agents may find optimal not to look...

Persistent link: https://www.econbiz.de/10011152453

Remedies for Sick Insurance

McFadden, Daniel; Noton, Carlos; Olivella, Pau - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

This expository paper describes the factors that contribute to failure of health insurance markets, and the regulatory mechanisms that have been and can be used to combat these failures. Standardized contracts and creditable coverage mandates are discussed, along with premium support, enrollment...

Persistent link: https://www.econbiz.de/10010691999

A Positive Theory of Geographic Mobility and Social Insurance

Hassler, John; Mora, José Vicente Rodríguez - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

Evidence suggests that unemployed individuals sometimes can affect their job prospects by undertaking a costly action like deciding to move or retrain. Realistically, such an opportunity arises only for some individuals and the identity of those is unobservable. Unemployment insurance should...

Persistent link: https://www.econbiz.de/10010547525

Loans, Insurance and Failures in the Credit Market for Students

Rey, Elena Del; Verheyden, Bertrand - Barcelona Graduate School of Economics (Barcelona GSE) - 2008

-post moral hazard and adverse selection produces credit market rationing when default penalties are low. Intermediate levels of … default penalties can result in the existence of an equilibrium that pools together ability types. However, pooling contracts … are not insuring at equilibrium, which implies a second type of credit market failure. Finally, if default penalties are …

Persistent link: https://www.econbiz.de/10010547090

International Capital Flows and Credit Market Imperfections: a Tale of Two Frictions

Martin, Alberto; Taddei, Filippo - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

The financial crisis of 2007-08 has underscored the importance of adverse selection in financial markets. This friction has been mostly neglected by macroeconomic models of financial frictions, however, which have focused almost exclusively on the effects of limited pledgeability. In this paper,...

Persistent link: https://www.econbiz.de/10010547330

Adverse selection, credit, and efficiency: the case of the missing market

Martin, Alberto - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

We analyze a standard environment of adverse selection in credit markets. In our environment, entrepreneurs who are privately informed about the quality of their projects need to borrow in order to invest. Conventional wisdom says that, in this class of economies, the competitive equilibrium is...

Persistent link: https://www.econbiz.de/10010547526

Equilibrium Limited Liability Contracts in a Landlord-Tenant Market

Dam, Kaniska; Pérez-Castrillo, David - Barcelona Graduate School of Economics (Barcelona GSE) - 2003

We propose a model based on competitive markets in order to analyse an economy with several homogeneous landlords and heterogeneous tenants. We model the landlord- tenant economy as a two-sided matching game and characterise the equilibrium of this market. In equilibrium, contracts are Pareto...

Persistent link: https://www.econbiz.de/10010851498

Monotone Strategyproofness

Halaburda, Hanna; Haeringer, Guillaume - Barcelona Graduate School of Economics (Barcelona GSE) - 2013

We propose a way to compare the extent of preference misrepresentation between two strategies. We define a mechanism to be monotone strategyproof when declaring a "more truthful" preference ordering in the mechanism dominates - with respect to the true preferences - declaring a less truthful...

Persistent link: https://www.econbiz.de/10010692008

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