An impatient and risk-neutral government can sell bonds at any time to a more patient group of competitive lenders. The key problem: the government cannot commit to either a particular financing strategy, or a default strategy. Despite risk-neutrality, in equilibrium debt adjusts slowly towards...

This book presents the theory of general economic equilibrium from a modern perspective. It gives a systematic exposition of research done by the authors and others on the subject of general equilibrium theory over the last ten years. It is intended to serve both as a graduate text on aspects of...

This book presents the theory of general economic equilibrium from a modern perspective. It gives a systematic exposition of research done by the authors and others on the subject of general equilibrium theory over the last ten years. It is intended to serve both as a graduate text on aspects of...

Changes in total surplus and deadweight loss are traditional measures of economic welfare. We propose necessary and sufficient conditions for rationalizing consumer demand data with a quasilinear utility function. Under these conditions, consumer surplus is a valid measure of consumer welfare....