In this paper we use global analysis to study the welfare properties of general equilibrium economies with incomplete markets (GEI). Our main result is to show that constrained Pareto optimal equilibria are contained in a linear submanifold of the equilibrium set. This result is explicitly...

This paper proposes that the introduction of non-redundant assets can endogenously modify trader participation in financial markets, which can lead to a lower market premium and a higher interest rate. We demonstrate this mechanism in a tractable exchange economy with endogenous participation....

Financial innovation in an existing asset generically supports a Pareto improvement, targeting the income effect. This result, as several on taxation, owes to one unifying notion: that an intervention generically supports Pareto improvements if the implied price adjustment is sufficiently...

[...]This article develops a stylized game-theoretical model toanalyze banks’ intraday liquidity management behavior in anRTGS environment. It analyzes the strategic incentives under Envision an economy with two identical banks using an RTGSsystem operated by the central bank to settle...

[...]The overall conclusion drawn from the research presented isthat monetary policy appears to have less of an impact on realactivity than it once had—but the cause of that change remainsan open issue. The conference papers explored threehypotheses en route to that finding. First, the...

Banks and other lenders often transfer credit risk to liberate capital for further loan intermediation. This paper aims to explore the design, prevalence and effectiveness of credit risk transfer (CRT). The focus is on the costs and benefits for the efficiency and stability of the financial...

This paper adopts a normative approach to catastrophe insurance.

This paper estimates the issuers' demand for the banker's underwriting service across different varieties of equity-linked securities.

This paper shows how this becomes an informational first-mover advantage that turns innovators into the market leader.

This paper shows how a financial institution can profit from the development of financial products even if they are unpatentable.