An unfunded Social Security system faces a major risk, sometimes referred to as ‘political risk’. In order to account properly for this risk, the paper considers a political process in which the support to the system is asked from each newborn generation. The analysis is conducted in an...

The present Paper investigates political constraints that may impair attempts to reform payment schemes of a given profession. When the good produced (e.g. health care) is imperfectly observable by the payer (e.g. health insurance), asymmetries of information limit the possibility to base...

An intricate web of claims and obligations ties together the balance sheets of a wide variety of financial institutions. Under the occurrence of default, these interbank claims generate externalities across institutions and possibly disseminate defaults and bankruptcy. Building on a simple model...