We study a financial market economy with a continuum of borrowers and pooling of borrowers’ promises. Under these conditions and in the absence of designing costs, utility-maximizing decisions of price-taking borrowers may lead to financial market incompleteness. Parametrizing equilibria...

In a two-period sunspot economy with inside money and "S" possible realizations of the sunspot, we prove that, generically in the space of utility functions, there are ["S" - 1] degrees of real indeterminacy. This result generalizes the previously known result for sunspot models that,...

In this paper we re-examine generic constrained suboptimality of equilibrium allocations with incomplete numeraire asset markets. We provide a general framework which is capable of resolving some issues left open by the previous literature, and encompasses many kinds of intervention in partially...