While most of the literature concerned with indeterminacy considers a representative agent, some recent works have investigated the role of heterogenous agents on dynamics. This paper adds a contribution to the debate, stressing the effects of heterogeneity in consumers’ preferences within an...

This paper develops a simple model of the market for checks in Turkey. The Central Bank controls the lump-sum amount that the drawee banks are legally responsible to pay per bad check. An increase in this amount is believed to support real economy. I show that banks will tend to restrict the...

We develop a bidimensional matching model under transferable utility, where individuals are characterized by a continuous trait (e.g., socioeconomic status) and a binary attribute (e.g., smoking status).  The model is "truly multidimensional", in the sense that the impact of the traits cannot...

By introducing taste heterogeneity between mobile workers in a New Economic Geography (NEG) model where the housing price is the main driving force behind dispersion of workers we show that residential segregation and agglomeration are not the sole stable equilibria and that dispersion also...

Many studies have estimated the effect of taxes on taxable income. To account for nonlinear taxes these studies either use instrumental variables approaches that are not fully consistent, or impose strong functional form assumptions. None allow for general heterogeneity in preferences. In this...

Intuition and leading equilibrium models are at odds with the empirical evidence that expected returns are weakly related to volatility at the market level. This paper proposes a closed-form general equilibrium model, which connects the investors’ expectations of fundamentals with those...

This paper presents the first evidence linking directly household consumption profiles to the widely studied institution of sharecropping in developing countries. On the one hand, the theoretical rationale for sharecropping often calls for its risk sharing properties. On the other hand empirical...