Inclusive finance is a core concept of finance that makes various financial products and services accessible and affordable to all individuals and businesses, especially those excluded from the formal financial system. One of the leading forces affecting people's ability to access financial...

We provide a concise introduction to a household-panel data infrastructure that provides the international research community with longitudinal data of private households in Germany since 1984: the German Socio-Economic Panel (SOEP). We demonstrate the comparative strength of the SOEP data in...

The productivity paradox has sparked a great deal of research during the past three decades. Unfortunately, neither the results of empirical research nor the theoretical explanations for the paradox provide a convincing answer to whether investments in information and communication technology...

Behavioral economics aspires to replace the agents of neoclassical economics with living, breathing human beings. Here, the author argues that behavioral economics, like its neoclassical counterpart, often neglects the role of active sense-making that motivates and guides much human behavior....

We present a model in which investors observe the same macroeconomic data but have varying levels of information about the parameters that determine the distribution of the expected returns on investment. During a crisis that increases macroeconomic uncertainty and reduces asset prices, the...

Modern economies rely heavily on their infrastructure networks. These networks face threats ranging from natural disasters to human attacks. As networks are pervasive, the investments needed to protect them are very large; this motivates the study of targeted defense. What are the 'key' nodes to...

In the linear coinsurance problem, examined first by Mossin (1968), a higher absolute risk aversion with respect to wealth in the sense of Arrow-Pratt implies a higher optimal coinsurance rate. We show that this property does not hold for health insurance under ex post moral hazard; i.e., when...

Die aktuelle Finanzkrise hat es an den Tag gebracht. Die Mehrzahl der wirtschaftlichen Akteure handelt nicht in der Form rational, wie es die ökonomische Theorie erwartet, sondern nach alltagsökonomischen Faustregeln. Rational sind diese nur insoweit, als es sich nach Auffassung der Masse vor...

A fundamental question in economic policy is how labor supply responds to changes in remuneration. The responsiveness of labor supply determines the size of the employment impact and efficiency loss of progressive income taxation. It also affects predictions about the impacts of policies ranging...

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...