Showing 1 - 10 of 1,078
This paper studies a competitive general equilibrium model with default and endogenous collateral constraints. Even …
Persistent link: https://www.econbiz.de/10008552792
These lecture notes are about financial innovations. We ask why are there some innovation and how is an innovative idea realized. This forces us to consider practical and structural aspects (regulations, taxation, markets) as key drivers of innovations and also basic formal aspects in valuation....
Persistent link: https://www.econbiz.de/10011109326
The aim of this paper is to prove that if the consumption set of an economy with incomplete financial markets is semi-algebraic, then the corresponding pseudo-equilibrium manifold is also semi-algebraic. For this, we proceed by constructing an incomplete financial economy with real assets and...
Persistent link: https://www.econbiz.de/10011111134
Abstract Medical bankruptcy was at the heart of the health care reform debate. According to Himmelstein et al. (2009), 62.1 percent of bankruptcies in the United States in 2007 were due to medical reasons. At the same time over 15 percent of Americans had no health insurance. The 2010 health...
Persistent link: https://www.econbiz.de/10011112090
Two major trends in the world economy are international migration and environmental degradation. The object of the paper is to analyze the connection between these two trends, which have generally been analyzed in isolation. Here we represent a world economy in which the exploitation of natural...
Persistent link: https://www.econbiz.de/10005786930
This article has developed a new model of welfare dynamics under imperfect information or imperfect competition by introducing a new concept of ‘inefficient welfare equilibrium’. It assumes that an economy can be split into two virtual parts. For one part the fundamental welfare theorems are...
Persistent link: https://www.econbiz.de/10005619840
In this paper, we provide a characterization of interim inefficiency in stochastic economies of overlapping generations under possibly sequentially incomplete markets. With respect to the established body of results in the literature, we remove the hypothesis of two-period horizons, by...
Persistent link: https://www.econbiz.de/10005835386
of the risky debt instruments. First we introduce a formal definition of the default. It somewhat close but does not … coincide with the reduced form of the default setting. …
Persistent link: https://www.econbiz.de/10005836474
In [10] we presented a reduced form of risky bond pricing. At the default date a bond seller fail to continue fulfill … his obligation and the price of the bond sharply drops down. If the face value of the defaulted bond for no-default … scenarios is $1 then the bond price just after default is called its recovery rate (RR). Rating agencies and theoretical models …
Persistent link: https://www.econbiz.de/10005837086
In his Inquiry into the Nature and Causes of the Wealth of Nations Adam Smith (1776) considered the phenomenon of division of labor so enormously significant for the creation of a nation’s wealth that he devoted the first three chapters of his book to an investigation of this process. This is...
Persistent link: https://www.econbiz.de/10008596380