This paper gives a non-fixed point theoretic proof of equilibrium existence when the excess demand function of an exchange economy obeys the weak axiom. The proof is simple and geometrically intuitive, and it also permits a weakening of the continuity assumption on the excess demand function....

The paper presents a model where individuals decide to become workers or entrepreneurs in the presence of capital constraints and where individuals differ in wealth levels.  The model shows that the higher the initial level of inequality in wealth is, the lower the long run aggregate wealth of...

Consider a two period financial economy with incomplete markets and with agents having von Neumann-Morgenstern utility functions. It is well known that when the economy’s endowments are collinear, its excess demand function will obey the weak axiom when certain mild restrictions are...

A common theme in the theory of demand aggregation is that market demand can acquire properties which are not always individually present among the agents who make up that market, a phenomenon we call heterosis in this paper. This paper focusses on the well known result that with a suitable...

In the past 30 years, microfinance has carried many promises of social and economic transformation, with the shift towards targeting women being seen as a major strategic move through which the promise of social development could be most effectively delivered.  However, ethnographic studies...

This paper studies how capital-scarce countries should manage volatile resource income.  Existing literature recommends that capital-scarce countries invest domestically, but that volatile resource income should be saved in a foreign sovereign wealth fund.  I reconcile these by combining a...

A generalized version of the capital management problem posed in a classic paper by R.H. Strotz is analyzed for the case of the naive planner who fails to anticipate any impending change in his own preferences. By imposing progressively stronger restrictions on the primitive of the problem -...

Households in developing countries use a variety of informal mechanisms to cope with risk, including mutual support and risk-sharing. These mechanisms cannot avoid that they remain vulnerable to shocks. Public programs in the form of food aid distribution and food-for-work programs are meant to...

We apply the set up of limited commitment model to empirically test the role of informal risk-sharing ntworks using panel data on informal credit transactions from rural Ethiopia. The empirical estimates provide convincing evidence for the belief that enforcement problem limits the direct role...

We study the effect of hyperbolic discounting on competitive equilibria in secondary markets for a durable good. Under exponential discounting, secondary markets are irrelevant in our model. They do not affect the price in the initial period and are neutral to the allocation. Under hyperbolic...