Welfare Effects of Financial Innovation in Incomplete Markets Economies with Several Consumption Goods

1995 ◽  
Vol 65 (1) ◽  
pp. 43-78 ◽  
Author(s):  
Ronel Elul
Keyword(s):  
Incomplete Markets ◽  
Financial Innovation ◽  
Welfare Effects ◽  
Consumption Goods

scholarly journals Optimal Taxation with Private Insurance

2021 ◽  
Author(s):  
Yongsung Chang ◽  
Yena Park
Keyword(s):  
Incomplete Markets ◽  
Optimal Taxation ◽  
Private Insurance ◽  
Borrowing Constraints ◽  
Welfare Effects ◽  
Sufficient Statistics ◽  
Pecuniary Externalities ◽  
Optimal Tax ◽  
Private Market ◽  
Asset Distribution

Abstract We derive a fully nonlinear optimal income tax schedule in the presence of private insurance. We fill the gap in the literature by studying the optimal tax formula with a comprehensive structure of the private markets—including incomplete markets models— both theoretically and quantitatively. As in the standard taxation literature without private insurance (e.g., Saez (2001)), the optimal tax formula can still be expressed in terms of standard sufficient statistics. With private insurance, however, the formula involves additional terms that reflect how the private market interacts with public insurance. For example, the optimal tax formula should also consider asset distribution and pecuniary externalities as well as the welfare effects of borrowing constraints.

scholarly journals Fiscal Consolidation: Welfare Effects of the Adjustment Speed

2020 ◽  
pp. 39-67
Author(s):  
Miguel Fonseca
Keyword(s):  
Incomplete Markets ◽  
Overlapping Generations ◽  
German Economy ◽  
Welfare Effects ◽  
Fiscal Consolidation ◽  
Welfare Gains ◽  
Overlapping Generations Model ◽  
Distribution Of Wealth ◽  
Adjustment Speed ◽  
Fiscal Consolidations

This article studies the response of social welfare to fiscal consolidations, by focusing on a less debated characteristic of fiscal plans: the speed of deleveraging. A neoclassical overlapping generations model is calibrated to the German economy, and a sequence of reductions of the same size in the debt‑ to GDP ratio are simulated considering different adjustment periods. Welfare gains are found to be larger in slow, delayed fiscal consolidations, due to the presence of incomplete markets. It is also found that the aggregate welfare response depends on the distribution of wealth and the type of fiscal instrument used.

Pareto improving financial innovation in incomplete markets

1998 ◽  
Vol 11 (3) ◽  
pp. 467-494 ◽  
Author(s):  
David Cass ◽  
Alessandro Citanna
Keyword(s):  
Incomplete Markets ◽  
Financial Innovation ◽  
Pareto Improving

scholarly journals Competitive Equilibria With Incomplete Markets and Endogenous Bankruptcy

2003 ◽  
Vol 3 (1) ◽  
Author(s):  
Tarun Sabarwal
Keyword(s):  
Incomplete Markets ◽  
Welfare Effects ◽  
Exchange Economy ◽  
Competitive Markets ◽  
Realistic Representation ◽  
Competitive Equilibria

This paper constructs a model of an exchange economy in which bankruptcy arises in a manner similar to what we observe. Compared to related models, this model is a more realistic representation of some markets in which intertemporal assets are traded. Using standard and natural assumptions, it is shown that every economy represented by this model has an equilibrium. Therefore, bankruptcy can co-exist with smoothly functioning competitive markets in fairly general economies. Examples highlight some welfare effects of bankruptcy.

Welfare Effects of Introducing Competition in the Telecom Sector in Djibouti

2019 ◽  
Author(s):  
Xavier Stephane Decoster ◽  
Gabriel Lara Ibarra ◽  
Vibhuti Mendiratta ◽  
Marco Santacroce
Keyword(s):  
Welfare Effects ◽  
Telecom Sector
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