Bei unvollkommenen Märkten und numerairen Vermögen gibt es eine offene Menge an Volkswirtschaften, so dass die Gleichgewichtsverteilung durch eine veränderte Anfangsverteilung verbessert werden kann. Dies stärkt das klassische Ergebnis der eingeschränkten Pareto Ineffizienz von...

In this paper, we examine an exchange economy with a financial market composed of three assets: a share of a stock, an European call option written on the stock, and a riskless bond. The financial market is assumed to be incomplete and the option is not a redundant asset. In such a case the...

We study the dynamic Ramsey problem of finding optimal public debt and linear taxes on capital and labor income within a tractable infinite horizon model with incomplete markets. With zero public expenditure and debt, it is optimal to tax the risky labor income and subsidize capital, while a...

In a dynamically efficienct economy, can a government roll its debt forever and avoid the need to raise taxes? In a series of examples of production economies with zero growth, this paper shows that such Ponzi games may be infeasible even when the average rate of return on bonds is negative, and...

This chapter reviews the theory of the voluntary public and private redistribution of wealth elaborated by economic analysis in the last forty years or so. The central object of the theory is altruistic gift-giving, construed as benevolent voluntary redistribution of income or wealth. The theory...

Are market and voting institutions capable of producing optimal intergenerational risk-sharing? To study this question we consider a simple endowment economy with uncertainty and overlapping generations. Endowments are stochastic; thus it is possible to increase the welfare of every generation...

Existing research on ecosystems is overly descriptive and structural. While description and structure are important, in this essay we argue for a microanalytic and firm-specific approach to ecosystems. We focus on the “hypothesis-led” firm—the role that a firm-specific hypothesis plays in...

We propose a 2-country asset-pricing model where agents' preferences change endogenously as a function of the popularity of internationally traded goods. We determine the effect of the time-variation of preferences on equity markets, consumption and portfolio choices. When agents are more...

This paper analyzes how insurance companies allow the issue of market incompleteness to be overcome. A general equilibrium economy is considered in which heterogeneous agents face endowment risks. Markets are incomplete: there are only markets for trading commodities ex-post and hedging price...

In competitive economies with private firm ownership, incomplete markets, and firm shareholders changing over time, several firm objectives have been proposed. Some are useful to understand efficiency of equilibria, and others are explicitly consistent with majority shareholder control or...