This paper shows equilibrium existence for an infinite–horizon exchange economy with incomplete markets of real assets when default is allowed. Borrowers are required to constitute collateral in terms of durable goods and face credit constraints that depend on their past default. When credit constraints are inelastic, Ponzi schemes are ruled out and an equilibrium exists. JEL Classification: D5...

this paper presents a new index of financial stress which is constructed by macro data from different financial markets (including banking sector and also housing, foreign exchange and stock markets). the proposed approach has been applied to the iranian economy based on the available quarterly time series, covering the period 1991(1)–2008(2). the paper explains how the selected components capt...

This paper is a reply to Barry Ickes' critique of my paper “Trust versus Illusion: What is Driving Demonetization in Russia?” in which I show that the data reject Barry Ickes' Virtual Economy explanation of barter in Russia in favor of an institutional explanation based on the lack of trust. JEL Classification: D20, G30, O10, P30

We study the wealth distribution in Bewley economies with idiosyncratic capital income risk. We show analytically that under rather general conditions on the stochastic structure of the economy, a unique ergodic distribution of wealth displays a fat tail. © 2015 Elsevier Inc. All rights reserved. JEL classification: E13; E21; E24

In the jungle, power and coercion govern the exchange of resources. We study a simple, stylized model of the jungle that mirrors an exchange economy. We define the notion of jungle equilibrium and demonstrate that a number of standard results of competitive markets hold in the jungle. JEL Classification: C7, D4, S477, B201

In interim economies with asymmetric information, we show that the coarse core of Wilson (1978) does not converge to price equilibrium allocations as the economy is replicated. This failure of core convergence is a basic consequence of asymmetric information and extends to any reasonable notion of either (interim) core or price equilibrium. JEL Classification: C71, D51

H10, B25, A11 KEy woRdS: JEL Classification: political economy, public choice, constitutional economics, institutions, 1 University of Warwick, UK; CREMA – Center for Research in Economics, Management and the Arts, Switzerland 2 University of Zurich, Switzerland Corespondence concerning to this article should be addressed to: [email protected] Bruno S. Frey1 and Lasse Steiner2

In an economy with commodity-pairwise trading posts and transaction costs, commodity money is endogenously determined in general equilibrium. Absent double coincidence of wants, the lowtransaction cost commodity (with the narrowest proportional bid/ask price spread) becomes the common medium of exchange. JEL Classification: C62, E40

Aiyagari (1992) shows that equilibria are nonoptimal for an overlapping generations economy if and only if Walras’ Law fails. We demonstrate that this failure represents an earnings opportunity exploitable by unsecured debt issue. When unsecured debt is issued, Walras’ Law holds. JEL Classification: D5, D6, D9

The purpose of this paper is to give a global characterization of excess demand functions in a two period exchange economy with incomplete real asset markets. We show that continuity, homogeneity and Walras’ law characterize the aggregate excess demand functions on any compact price set which maintains the dimension of the budget set. JEL classification: D52, C62.