Bloise, Gaetano; Reichlin, Pietro - Istituto Einaudi per l'Economia e la Finanza (EIEF) - 2008
In this paper, we consider economies with (possibly endogenous) solvency constraints under uncertainty. Constrained inefficiency corresponds to a feasible redistribution yielding a welfare improvement beginning from every contingency reached by the economy. A sort of Cass Criterion (Cass, 1972)...