SFB 649 Discussion Paper 2006-054 On the Coexistence of Banks and Markets Hans Gersbach* Harald Uhlig** * University of Heidelberg and CEPR ** Humboldt-Universität zu Berlin, Deutsche Bundesbank, CentER and CEPR This research was supported by the Deutsche...

SFB 649 Discussion Paper 2006-070 The Welfare Enhancing Effects of a Selfish Government in the Presence of Uninsurable, Idiosyncratic Risk R. Anton Braun* Harald Uhlig** * Faculty of Economics, University of Tokyo, Japan ** Institute of Economic Policy I,...

This paper characterizes the transition dynamics of a continuous-time neoclassical production economy with capital accumulation in which households face idiosyncratic income risk and cannot commit to repay their debt. Therefore, even though a full set of contingent claims that pay out...