We study a two-sector general equilibrium model of housing andnon-housing production where heterogenous households face limitedopportunities to insure against aggregate and idiosyncratic risks. Themodel generates large variability in the national house price-rentratio, both because it fluctuates...

Economics

The thesis is composed of three chapters. The first chapter proposes that financial innovation induces endogenous changes in the composition of market participants, which can both increase the interest rate and reduce the risk premia earned on pre-existing assets. We consider an exchange economy...