We study the existence of a profitable unemployment insurance market in a dynamic economy with adverse selection rooted in workers’ advance information on future job losses. The new feature of the model is that the insurer and workers interact repeatedly. Repeated interactions make it possible...

In this paper, we revisit the conventional view on efficient risk sharing that advance information on future shocks is detrimental to welfare. In our model, risk-averse agents receive private and public signals on future income realizations and engage in insurance contracts with limited...

This paper examines how money demand induced real balance effects contribute to the determination of the price level, as suggested by Patinkin (1949,1965), and if they affect conditions for local equilibrium uniqueness and stability. There exists a unique price level sequence that is consistent...

This paper studies optimal monetary policy with the nominal interest rate as the single policy instrument in an economy,where firms set prices in a staggered way without indexation and real money balances contribute separately to households'utility. The optimal deterministic steady state under...