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Grossman, Herschel I. - 2002

Constitutional resolution of disputes between constituent groups of a polity avoids the incremental costs of civil conflict. But, the political process prescribed by a constitution provides a viable alternative to civil conflict if and only if the constitution is self enforcing. This paper...

Persistent link: https://www.econbiz.de/10010318884

Generalized reduced rank regression

Hansen, Peter Reinhard - 2002

I introduce a technique to estimate parameters in regressions with reduced rank parameters in a general setting. The framework can handle a general class of parameter restrictions and allows for specifications with heteroskedastic and autocorrelated regression errors. Applications of this...

Persistent link: https://www.econbiz.de/10010318886

Money and prices under uncertainty

Nakajima, Tomoyuki; Polemarchakis, Herakles - 2001

Monetary and fiscal policy do not determine the stochastic path of prices: in the absence of financial policy, there remains indeterminacy indexed by an arbitrary probability measure over the set of states of the world. With an interest rate policy, and only if the asset market is complete,...

Persistent link: https://www.econbiz.de/10010318888

A theory of the informal sector

Azuma, Yoshiaki; Grossman, Herschel I. - 2002

In many countries, especially poor countries, a heavy burden of taxes, bribes, and bureaucratic hassles drives many producers into the informal sector. Is this situation explicable only as a consequence of either the ignorance or the ineptitude of the state authorities? On the contrary this...

Persistent link: https://www.econbiz.de/10010318889

Market power and information revelation in dynamic trading

Gottardi, Piero; Serrano, Roberto - 2002

one seller, full information revelation never occurs in equilibrium and the only information transmission happens in the … first period. The outcome with n sellers depends both on the structure of sellers' information and, more importantly, on the … intensity of competition among them allowed by the trading rules. With intense competition (absence of clienteles), information …

Persistent link: https://www.econbiz.de/10010318890

Trade and the great divergence: The family connection

Galor, Oded; Mountford, Andrew - 2006

This research argues that the rapid expansion of international trade in the second phase of the industrial revolution has played a major role in the timing of demographic transitions across countries and has thereby been a significant determinant of the distribution of world population and a...

Persistent link: https://www.econbiz.de/10010318893

Constrained inefficiency in GEI: A geometric argument

Tirelli, Mario - 2005

In this paper we use global analysis to study the welfare properties of general equilibrium economies with incomplete markets (GEI). Our main result is to show that constrained Pareto optimal equilibria are contained in a linear submanifold of the equilibrium set. This result is explicitly...

Persistent link: https://www.econbiz.de/10010318896

An economic index of riskiness

Aumann, Robert J.; Serrano, Roberto - 2006

Define the riskiness of a gamble as the reciprocal of the absolute risk aversion (ARA) of an individual with constant ARA who is indifferent between taking and not taking that gamble. We characterize this index by axioms, chief among them a “duality” axiom which, roughly speaking, asserts...

Persistent link: https://www.econbiz.de/10010318897

Non-existence of recursive equilibria on compact state spaces when markets are incomplete

Krebs, Tom - 2002

This paper analyzes one-good exchange economies with two infinitely-lived agents and incomplete markets. It is shown that there are no recursive (Markov) equilibria for which borrowing (debt) constraints never bind if the state space of exogenous and endogenous variables is a compact subset of...

Persistent link: https://www.econbiz.de/10010318900

Pareto improving financial innovation in incomplete markets

Turner, Sergio - 2005

recent developments in demand theory with incomplete markets. …

Persistent link: https://www.econbiz.de/10010318902