300 years after Newton, although we are "enlightened" to widerstand the laws of nature, our world is far from being deterministic. Instead, we have to make decisions under uncertainty: we buy goods whose quality is not exactly known, we hire workers before learning their actual productivity, or...

This paper examines the effects of credit market imperfections and idiosyncratic risks on occupational choice, capital accumulation, as well as on the income and wealth distribution in a two sector heterogeneous agent general equilibrium model. Workers and firm owners are subject to...