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This essay reviews the family of models that seek to provide aggregate risk based explanations for the empirically observed equity premium. Theories based on non-expected utility preference structures, limited financial market participation, model uncertainty and the small probability of...
Persistent link: https://www.econbiz.de/10005589022
. A model of efficient barter and local inside money is developed to show how chronic specie scarcity in colonial America …
Persistent link: https://www.econbiz.de/10011271405
monetarism: Milton Friedman and the team of Karl Brunner and Allan Meltzer. Friedman did not explicitly state the reasons he … generally chose not to use the IS-LM model in rejecting Keynesian views on the demand function for money, the role of autonomous … three assets: base money, government debt, and real capital. They set up a model with financial institutions and utilized it …
Persistent link: https://www.econbiz.de/10005777940
School choice plans in many cities grant students higher priority for some (but not all) seats at their neighborhood schools. This paper demonstrates how the precedence order, i.e. the order in which different types of seats are filled by applicants, has quantitative effects on distributional...
Persistent link: https://www.econbiz.de/10010969267
We introduce a general framework to analyze the trade-off between education and family size. Our framework incorporates parental preferences for birth order and delivers theoretically consistent birth order and family size effects on children's educational attainment. We develop an empirical...
Persistent link: https://www.econbiz.de/10010969380
Centralized and coordinated school assignment systems are a growing part of recent education reforms. This paper estimates school demand using rank order lists submitted in New York City's high school assignment system launched in Fall 2003 to study the effects of coordinating admissions in a...
Persistent link: https://www.econbiz.de/10011213648
I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for...
Persistent link: https://www.econbiz.de/10008627143
We study the asset pricing implications of an economy where solvency constraints are determined to efficiently deter agents from defaulting. We present a simple example for which efficient allocations and all equilibrium elements are characterized analytically. The main model produces large...
Persistent link: https://www.econbiz.de/10005714433
We characterize equilibria with endogenous debt constraints for a general equilibrium economy with limited commitment in which the only consequence of default is losing the ability to borrow in future periods. First, we show that equilibrium debt limits must satisfy a simple condition that...
Persistent link: https://www.econbiz.de/10005775063
We study the asset pricing implications of a multi-agent endowment economy where agents can default on contracts that would leave them otherwise worse off. We specialize and extend the environment studied by Kocherlakota (1995) and Kehoe and Levine (1993) to make it comparable to standard...
Persistent link: https://www.econbiz.de/10005777285