In this paper we argue that market incompleteness resulting from limited stock market participation is important for understanding the behavior of asset prices. (JEL: E32, E44, G12) (c) 2006 by the European Economic Association.

Data on the life-cycle profiles of inequality in wages, earnings, hours worked, and consumption contain precious information for answering questions about the ability of households to insure labor market risk and about the sources of this risk. This paper demonstrates that the choice of whether...

We examine how technological change affects wage inequality and unemployment in a cali-brated model of matching frictions in the labor market. We distinguish between two polar cases studied in the literature: a "creative destruction" economy, where new machines enter chiefly through new matches...