This paper examines the effects of financial market imperfections in the context of financial integration. We employ a general equilibrium model with heterogeneous entrepreneurs and address the question of cross-border capital flows from poor to rich as well as focus on aggregate capital...

This paper develops a model where firms' equilibrium capital structures depend on firms' risk characteristics and investors' aggregate risk appetite. I assume that the law of one price fails because security markets are incomplete and risk-sharing through short-selling or borrowing is limited....

This paper seeks to situate an understanding of the long-term implications of Smart Contract (SC) technologies as a cluster of technologies that together with AI (shorthand for software applications) and 5G (shorthand for networked ICTs) will prove important for enabling a future wherein any...

Limited attention may play a role in explaining the inability to reach savings goals (Karlan, McConnell, Mullainathan and Zinman, forthcoming). Presuming that attention is a scarce resource and important for the pursuit of saving plans, limits to attention in inter-temporal consumption and...

The presentation analyzes whether the success of persuasive messages depends on an individual's behavioral bias: If at the onset of a savings period saving goals are chosen with over- or underconfidence, i.e. individuals over- or underestimate their savings potential, individuals might save too...

This paper studies an environment with two infinitely-lived altruistic agents whose only sources of income are a risk-free return on savings and voluntary transfers from the other player. We study the Markov-perfect equilibrium of a continuous-game (differential game). On the technical side, we...

This paper studies the structure and dynamics of consumption and consumption growth inequality. The theoretical framework is a heterogeneous agent model with stochastic labor endowments, where the group mean consumption serves as consumption externality. The main finding is that households'...

This paper analyzes optimal linear taxes on labor income and savings in a standard two-period life-cycle model with endogenous leisure demands in both periods and non-insurable income risks. Households are subject to skill shocks in both periods of the life-cycle. We allow for completely general...

We develop an insurance market model where consumers (i) exhibit present-biased preferences, and (ii) suffer from physical pain in case of (health-) damage. They can exert preventive effort to reduce the probability of damage. Sophisticated consumers correctly anticipate their effort and...

Many empirical studies on intertemporal choice report preference reversals in the sense that a preference between a small reward to be received soon and a larger reward to be received later reverses as both rewards are equally delayed. Such preference reversals are commonly interpreted as...