We construct a general equilibrium model in which a pay-as- you-go social security system can be adopted and sustained as a political and economic equilibrium. We analyze the welfare implications of this system and compare general equilibrium welfare measures to the commonly used notion of...

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output....

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output....