It is now widely believed that government intervention is essential to ensure Pareto efficiency in the standard overlapping generations economy with nonaltruistic agents. This paper argues that the normal profit-seeking activities of {\it private intermediaries\/}---missing from the standard...

The objective of this note is to show that the positively valued excess supplies which Aiyagari (JME, 1992) connects with Pareto inefficiency for overlapping generations economies represent an economic opportunity that can potentially be exploited by government or by a private financial...