In his autobiographical essay “The Ins and Outs of Late Twentieth Century Economics,” Duncan Foley (1999) observed that “economics in the late 1960s suffered from a classical scientific dilemma in that it had two theories, the microeconomic general equilibrium theory, and the macroeconomic Keynesian theory, each of which seemed to have considerable explanatory power in its own domain, but which...

How does technological progress in financial intermediation affect the economy? To address this question a costly-state verification framework is embedded into a standard growth model. In particular, financial intermediaries can invest resources to monitor the returns earned by firms. The inability to monitor perfectly leads to firms earning rents. Undeserving firms are financed, while deservin...

This paper introduces the notion of a weighted Complementarity Problem (wCP), which consists in finding a pair of vectors (x, s) belonging to the intersection of a manifold with a cone, such that their product in a certain algebra, x ◦ s, equals a given weight vector w. When w is the zero vector, then wCP reduces to a Complementarity Problem (CP). The motivation for introducing the more general...

In each issue, Algorithmic Finance features a brief interview with one member of our advisory or editorial boards or another leading academic or practitioner. These brief conversations are intended to provide a glimpse of their current thinking. In this issue, we talk with Kenneth J. Arrow. Kenneth J. Arrow is the Joan Kenney Professor of Economics and Professor of Operations Research, emeritus...

Both Keynesians and modern institutional economists are critical of the “classical economists”. In being so, they employ similar micro foundations of the business behavior (the “institutional arrangements”) of individuals. Yet in contrast to Keynesians, the representatives of modern institutional economics incorporate the institutional framework into their analysis: For them, the linkage betwee...

In this paper, we prove some coupled coincidence point theorems for mappings with the mixed monotone property and obtain the uniqueness of this coincidence point. Then we providing useful examples in Nash equilibrium.

In the literature, it has been hotly debated whether the brain uses internal models or equilibrium point (EP) control to generate arm movements. EP control involves specification of EP trajectories, time series of arm configurations in which internal forces and external forces are in equilibrium; if the arm is not in a specified EP, it is driven toward this EP by muscle forces arising due to ce...

As it is well known in differential games, the open-loop Nash equilibrium (OLNE) concept with an infinite period of commitment is weakly time-consistent but not strongly time-consistent. On the other hand, the feedback Nash equilibrium (FBNE) is Markov perfect by construction and thus a more satisfactory solution concept, but solutions are usually very difficult to derive. Explicit solutions ca...