This paper deals with credit market imperfections and idiosyncratic risks in a two–sector heterogeneous agent dynamic general equilibrium model of occupational choice. We focus especially on the effects of tightening financial constraints on macroeconomic performance, entrepreneurial...

This paper examines the effects of credit market imperfections and idiosyncratic risks on occupational choice, capital accumulation, as well as on the income and wealth distribution in a two sectore heterogeneous agent general equilibrium model. Workers and firm owners are subject to...

This paper applies the concept of optimal obfuscation to fast-growth, high-inequality emergent economies. The obfuscation level depends on the nature of policy, government propaganda or 'spin', and GDP growth. The conditions are identified for a negative impact of economic growth on electoral...

To what extent should banks, insurance companies and employers be allowed to use personal information about the people whom they lend to, insure or employ in setting the terms of the contract? Even when different treatment is motivated by profit not prejudice, banning discrimination (when...

This paper combines the standard incomplete markets model of uninsurable idiosyncratic risks and borrowing constraints with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter also endogenously determined in equilibrium. We derive...

This paper examines the pattern of international capital flows in a two–sector dynamic general equilibrium heterogeneous agent model with financial frictions and idiosyncratic entrepreneurial risk. Countries differ only with respect to the tightness of constraints on the domestic credit...

The political left turn in Latin America, which lagged its transition to liberalized market economies by a decade or more, challenges conventional economic explanations of voting behavior. This paper generalizes the forward-looking voter model to a broad range of dynamic, non-concave income...

This paper deals with credit market imperfections and idiosyncratic risks in a two–sector heterogeneous agent dynamic general equilibrium model of occupational choice. We focus especially on the effects of tightening financial constraints on macroeconomic performance, entrepreneurial...

In the Solidarity game lucky winners of a lottery can transfer part of their income to unlucky losers. Will losers get smaller transfers if they can be assumed to be responsible for their zero income because they have chosen riskier lotteries? Or will risk-lovers and riskaverters favor those who...

In a laboratory-controlled environment we provide experimental evidence on the effects of transparency (complete over incomplete information) and empowerment on trust (investment by a principal) and trustworthiness (reciprocal behavior of an agent). We implement a simple two-person investment...