We present an overlapping generations model with spatial separation and agents who face liquidity risk to investigate the widely held belief that financial intermediaries exist because they save on transaction costs. We find that if agents only use a pure exchange mechanism, they engage in...

We analyze an overlapping generations economy where agents interact to share liquidity risk. We show that a pure exchange economy has excessive trade in equilibrium, and that intergenerational financial intermediaries reduce the number of interactions by catering to clienteles with uncorrelated...

We analyze an overlapping generations economy where agents interact to share liquidity risk. We show that a pure exchange economy has excessive trade in equilibrium, and that intergenerational financial intermediaries reduce the number of interactions by catering to clienteles with uncorrelated...

We survey the theories of why banks promise to pay par on demand and examine evidence about the conditions under which banks have promised to pay the par value of deposits and banknotes on demand when holding only fractional reserves. The theoretical literature can be broadly divided into four...

European and the US mobile communication services markets have developed in rather different ways. There are striking differences in termination regulation and retail pricing models and one may wonder why this occurred and whether either of the markets outperforms the other in terms of...

This paper presents a method to compare indices of inequality in health that are based on short-run and long-run measures of health and income. For pure health inequality (as measured by the Gini coefficient) and income-related health inequality (as measured by the concentration index), we show...

In this paper we look at the behaviour of households as far as participation and rate of consumption of tobacco are concerned using cohort data from the Spanish Continuous Family Expenditure Survey during the period 1985-94. We test the results, in statistical and economic terms, from several...

based on Chari and Jagannathan (1988), this paper models information-induced and "pure-panic"runs in an environment of risk-aves agents. In this framework, deposits are needed to provide insurance against investors'unexpected demand for liquidity and therefore, a role for financial intermediary...

The aim of this paper is twofold: First to test the adequacy of Pareto distributions to describe the tail of financial returns in emerging and developed markets, and second to study the possible correlation between stock market indices observed returns and return's extreme distributional...