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...

This paper integrates the literature of Mortgage Design with that of Rotating Savings and Credit Associations (ROSCAs) to present a novel way of mortgage financing (with a zero interest rate) using cooperatives. This mode of financing dissipates credit (default) risk better than the normal mode...

A system of agents interacting in a network with a globalization-polaritation transition is studied in the context of a cultural dissemination model. We consider different types of fields interpreted as forms of mass media acting on the system. Both for autonomous and external fields,...

The paper revisits dynamic term structure models (DTSMs) and proposes a new way in dealing with the limitation of the classical affine models. In particular, this paper expands the flexibility of the DTSMs by applying a fractional Brownian motion as the governing force of the state variable...