We consider a neoclassical growth model with risky investment projects in which a borrower's (an investor's) risk type is private information. Our innovation is to determine jointly the equilibrium loan contract and the economy's growth path and the steady state capital stock. We show that as...

We study the impact of a fully-funded social security system in an economy with heterogeneous consumers. The unobservability of individual health conditions leads to adverse selection in the private annuity market. Introducing social security - which is immune to adverse selection - affects...

In an overlapping generations maximization framework with consumers, whose information on uncertain future income realizations is front-loaded, a closed form aggregate consumption function with CRRA preferences is derived. To have a closed form solution we assume that consumers solve their...