We evaluate the asset pricing implications of a class of models in which risk sharing is imperfect because of limited enforcement of intertemporal contracts. Lustig (2004) has shown that in such a model the asset pricing kernel can be written as a simple function of the aggregate consumption...

Consumption models with endogenous debt constraints differ from standard incomplete markets models in their predictions about an individual household's ability to smooth consumption across time and states of the world. In this paper we develop these differences, both theoretically and...

This paper contributes to the debate initiated by Galí in 1999. I provide a theory with capital income taxation, labor hoarding as well as long-run shifts in the social attitudes to the workplace-modelled as "leisure at the workplace"-to argue that there are other shocks that may influence...