Alvarez and Jermann (2000) show that the constrained efficient allocations of endowment economies with imperfect risk sharing due to limited commitment can be decentralized as competitive equilibria with endogenous debt constraints that are not too tight. These are the loosest possible borrowing...

Immigration is having an increasingly important effect on the social insurance system in the United States. On the one hand, eligible legal immigrants have the right to eventually receive pension benefits, but also rely on other aspects of the social insurance system such as health care,...

Immigration is having an increasingly important effect on the social insurance system in the United States. On the one hand, eligible legal immigrants have the right to eventually receive pension benefits but also rely on other aspects of the social insurance system such as health care,...

In a model with capital accumulation, aggregate risk and competitive intermediaries, Abraham and Carceles-Poveda (2006) show that the constrained efficient allocations can be decentralized as a competitive equilibrium with endogenous borrowing limits that do not allow for default if one also...

Macroeconomic models with heterogeneous agents and incomplete markets (e.g. Krusell and Smith, 1998) usually assume that consumers, rather than firms, own and accumulate physical capital. This assumption, while convenient, is without loss of generality only if the asset market is complete. When...

This paper endogenizes the borrowing constraints on capital holdings in an infinite horizon incomplete markets model with production and idiosyncratic risk. In particular, it assumes that households can break their trading arrangements by going into financial autarky, in which case they are...

The implications of a context with household heterogeneity and incomplete financial markets have been mostly studied under the assumption that households own the physical capital and undertake the intertemporal investment decision. Further, firms rent capital and labor from the households to...

This paper studies the quantitative implications of a real business cycle model where the firm is the capital owner, households are heterogeneous, and markets are incomplete due to restricted asset trade. Since the usual firm objective is no longer well defined under these assumptions, several...

Motivated by the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) of 2003, we study the effects of capital income tax cuts in an economy with heterogeneous households and a representative, mature firm. Dividend tax cuts, contrary to capital gains tax cuts, lead to a decrease in investment...