In this paper risk sharing among individuals within and across regions in a federation with population mobility and infinite horizons is considered. It is shown that the regional authorities will not fully exploit gains from interregional risk sharing when population mobility is imperfect. In...

This paper studies some policy implications of the habit persistence model of Harl E. Ryder and Geoffrey M. Heal (1973) for a small open economy. It is shown that often the policy implications of the model that are consistent with the findings in the asset pricing literature are in conflict with...

This paper studies the effects of budget deficits financed by taxing corporate incomes. As households are finitely lived, transfers and taxes on personal incomes are discounted at a higher rate than the interest on government debt. As corporations are infinitely lived, taxes on corporations are...

In this paper we study the effects of monetary policies on employment, capital accumulation, consumption, and the term structure of interest rates in a cash-in-advance economy, where money is required for consumption expenditures. Monetary policy involves targeting the inflation rate. The...