This paper investigates the conditions under which socially responsible investment (SRI) is neutral from the viewpoint of general equilibrium theory. Three conditions are jointly sufficient for neutrality of SRI. First, the financial market is complete and SRI does not compromise the spanning...

In this paper we investigate the quantitative importance of search and matching frictions in Bulgarian labor markets. This is done by augmenting an otherwise standard real business cycle model a la Long and Plosser (1983) with both a two-sided costly search and fiscal policy. This introduces a...

If agents are ambiguity-averse and can invest in productive assets, asset prices can robustly exhibit indeterminacy in the markets that open after the productive investment has been launched. For indeterminacy to occur, the aggregate supply of goods must appear in precise configurations but the...

This paper studies a sole proprietorship economy with imperfect competition in a transferable utility setting. While consumers behave as price takers, producers issue real assets strategically to maximize their own utility. Even when complete markets are technologically feasible, equilibria with...

In oligopoly models with differentiated products, producers face a market demand function that reflects the preferences of consumers. However, typical assumptions on preferences place only weak restrictions on the shape of aggregate demand. This may result in profit functions that are not...

Purpose - The last decades have experienced increasingly integrated global political and economic dynamics ranging especially from the influence of exchange rates and trade amid other sources of uncertainties. The purpose of this study is to examine the exchange rate dynamics of Brazil, Russia,...

The existence of an exact Walrasian equilibrium in nonconvex economies is still a largely unexplored issue. This paper shows that such an equilibrium exists in nonconvex economies by following the nearby economyapproach introduced by Postlewaite and Schmeidler (Approximate Walrasian Equilibrium...

The distributions of income and wealth in countries across the world are found to possess some robust and stable features independent of the specific economic, social and political conditions of the countries. We discuss a few physics-inspired multi-agent dynamic models along with their...

It is shown that, in pure exchange economies, the individual demand functions can be recovered from the equilibrium set regardless of the way we evaluate wealth. Following Balasco (2004), the demand functions do not have to be differentiable, not even continuous nor utility maximizing. Thus, the...

Motivated by the problems of the conventional model in rationalizing market data, we derive the equilibrium interest rate and risk premiums using recursive utility in a continuous-time model. We use the stochastic maximum principle to analyze the model. This method uses forward/backward...