In this paper, we stress the influence of forecasts about the real economy on financial behaviour, and more particularly on the equilibrium prices of financial assets. We adapt the Portfolio Model and the CAPM (Capital Assets Pricing Model) so as to introduce explicitly the process of...

Differential equations with advanced and delayed arguments arise in the optimality conditions of continuous time growth models with delays. In this paper, we use optimal control theory with delays, and we propose a shooting method to numerically deal with this class of models. We find that for a...

In this paper, we analyze the role played by capacity utilization and maintenance costs in the propagation of aggregate fluctuations. To this purpose we use an extension of the general equilibrium stochastic growth model that incorporates a depreciation technology depending upon both capital...

In a general equilibrium framework, this paper tries to reproduce an important stylized fact of real economies: firms set prices under demand uncertainty while consumption decisions are taken when prices are already known. Under these assumptions, there is place for a quantity rationing...

In the tradition of Tobin's q models, the influence on investment of demand uncertainty and capacity constraints is analyzed in a monopolistically competitive economy. Under these conditions, the degree of capacity utilization has a positive effect on the markup rate and explains the difference...

This paper presents an intertemporal model in which the agents may face different quantity constraints resulting from technological rigidities, microeconomic uncertainty and market segmentation. Its main purpose is to derive the path of the unemployment rate, the rate of capacity utilisation and...

A sectorial general equilibrium model in which externalities among sectors arise through wage envy is presented. Without externalities, equilibrium unemployment is only a function of the product market power of the firm and of demand uncertainty. With externalities, unemployment is higher. It is...

Parental altruism plays a particular role when standard-of-living aspirations are transmitted from one generation to the next. The influence of altruistic parents is not limited to the bequest they could leave; they also direct the evolution of children's aspirations by restraining their own...