Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates, and suffer from the usual defects of matching models. We embed endogenous participation in a simple, tractable job market matching model, show analytically...

We present an optimal (Ramsey) social security policy analysis in the presence of demographic uncertainties and incomplete markets. According to our findings, a social security system is an efficient instrument for intergenerational risk-sharing. When compared with government debt, a...

The paper deals with the efficient computation of general equilibrium models with a continuum of heterogenous agents. It compares an improved version of the Krusell-Smith algorithm to a backward-induction algorithm. The Krusell-Smith algorithm I use in the paper modifies the original algorithm...

Recent policy proposals call for setting up a benchmark indexed bond market to prevent "Sudden Stops". This paper analyzes the macroeconomic implications of these bonds using a general equilibrium model of a small open economy with financial frictions. In the absence of indexed bonds, negative...

In our paper we investigate how network effects influence the dynamics of oligopoly on mature telecommunication markets. The model covers four categories of agents: telecommunication operators, customers joined into housholds and market regulator. The market state aware firms use reinforcement...

This paper sets out first, to quantify the stabilization gains from commitment in terms of household welfare and second, to examine how commitment to an optimal or approximately optimal rule can be sustained as an equilibrium in which reneging hardly ever occurs. We utilize an influential...

Efficient algorithms for diagnosing influential data points are investigated. Techniques examining potentially influential subsets are considered. Given a list of candidate observations, a new row-dropping algorithm (RDA) computes all possible observation-subset regression models. It employs a...

Population aging threatens to severely destabilize the public finances of a majority of European countries. This unfavorable demographic prospect is usually reinforced by a widespread tendency to anticipate retirement. Reversing this tendency has been identified as a crucial factor to improve...

Base rate neglect has been shown to be a very robust bias in human information processing. It has also been show to be ecologically rational in some environments. However, when arguing about base rate neglect usually isolated individuals are considered. I complement these results by showing that...

In this paper we show that if all agents are equipped with well-behaved discrete concave production functions, then a feasible price allocation pair is a market equilibrium if and only if it solves a linear programming problem. Using this result we are able to obtain a necessary and sufficient...