Bank crises, by interrupting liquidity provision, have been viewed as resulting in welfare losses. In a model of banking with moral hazard, we show that second best bank contracts that improve on autarky ex ante require costly crises to occur with positive probability at the interim stage. When...

It is known through an earlier work (Grandmont and Laroque [2]), which analysed discontinuous least squares learning dynamics (around the steady state) in the case of linear temporary equilibrium maps, that there always exists an open cone of initial conditions for which the dynamics are locally...

In this paper, we introduce the notion of a linked domain and prove that a non-manipulable social choice function defined on such a domain must be dictatorial.

In this paper we identify a simple property of nonlinear temporary equilibrium map (TEM) that guarantees that all trajectories, along which the dynamics of the state variable remain bounded, converge to the steady state-in particular, the locally divergent trajactories also are driven back to...

India is fast emerging economy in Asia and world. India's manufacturing sector is growing faster and domestic demand is also increasing. India has a severe electricity shortage. It needs massive additions in capacity to meet the demand of its rapidly growing economy. To maintain the pace of...

We defi ne a solution concept, perfectly contracted equilibrium, for an intertemporal exchange economy where agents are simultaneously price takers in spot commodity markets while engaging in non-Walrasian contracting over future prices. In a setting with subjective uncertainty over future...

Bank crises, by interrupting liquidity provision, have been viewed as resulting in welfare losses. In a model of banking with moral hazard, we show that second best bank contracts that improve on autarky ex ante require costly crises to occur with positive probability at the interim stage. When...

We uncover a new necessary condition for implementation in iteratively undominated strategies by mechanisms that satisfy the “best element property” where for each agent, there exists a strategy profile that gives him the highest payoff in the mechanism. This class includes finite and...