Related papers: Land and Infinite Debt Rollover
This paper connects discrete optimal transport to a certain class of multi-objective optimization problems. In both settings, the decision variables can be organized into a matrix. In the multi-objective problem, the notion of Pareto…
We construct a model of an exchange economy in which agents trade assets contingent on an observable signal, the probability of which depends on public opinion. The agents in our model are replaced occasionally and each person updates…
Recent years have seen the concept of global symmetry extended to non-invertible (or categorical) symmetries, for which composition of symmetry generators is not necessarily invertible. Such non-invertible symmetries lead to a…
Cooperation between individuals is emergent in all parts of society, yet mechanistic reasons for this emergence is ill understood in the literature. A specific example of this is insurance. Recent work has, though, shown that assuming the…
In our model, private actors with interbank cash flows similar to, but nore general than (Carmona, Fouque, Sun, 2013) borrow from the outside economy at a certain interest rate, controlled by the central bank, and invest in risky assets.…
The nature of monetary arrangements is often discussed without any reference to its detailed construction. We present a graph representation that allows for a clear understanding of modern monetary systems. First, we show that systems based…
The viability of a given model for inflation is determined not only by the form of the inflaton potential, but also by the initial inflaton field configuration. In many models, field configurations which are otherwise well-motivated…
We revisit a time-dependent, oval-shaped billiard to investigate a phase transition from bounded to unbounded energy growth. In the static case, the phase space exhibits a mixed structure. The chaotic sea in the static scenario leads to…
This paper proposes new get-rich-quick schemes that involve trading in a financial security with a non-degenerate price path. For simplicity the interest rate is assumed zero. If the price path is assumed continuous, the trader can become…
We study the propensity of independent algorithms to collude in repeated Cournot duopoly games. Specifically, we investigate the predictive power of different oligopoly and bargaining solutions regarding the effect of asymmetry between…
We present a self-consistent model for explosive financial bubbles, which combines a mean-reverting volatility process and a stochastic conditional return which reflects nonlinear positive feedbacks and continuous updates of the investors'…
This paper investigates the emergence of wealth inequality through a minimalist kinetic exchange model that incorporates two fundamental economic features: fixed-amount transactions and hard budget constraints. In contrast to the maximum…
The recent book by T. Piketty (Capital in the Twenty-First Century) promoted the important issue of wealth inequality. In the last twenty years, physicists and mathematicians developed models to derive the wealth distribution using discrete…
Many modern areas have not learned their lessons and often hope for the wisdom of later generations, resulting in them only possessing modern technology and difficult to iterate ancient civilizations. At present, there is no way to tell how…
Microfinance, despite its significant potential for poverty reduction, is facing sustainability hardships due to high default rates. Although many methods in regular finance can estimate credit scores and default probabilities, these…
Optimization problems have been the subject of statistical physics approximations. A specially relevant and general scenario is provided by optimization methods considering tradeoffs between cost and efficiency, where optimal solutions…
This study proposes a new efficiency requirement, a minimal almost weak Pareto principle, which says that x is socially better than y whenever the only one individual never prefers y to x, and all the others prefers x to y. Then, I show…
We consider an infinite horizon portfolio problem with borrowing constraints, in which an agent receives labor income which adjusts to financial market shocks in a path dependent way. This path-dependency is the novelty of the model, and…
Since the advent of inflation, several theorems have been proven suggesting that although inflation can (and generically does) continue eternally into the future, it cannot be extended eternally into the past to create a ``steady-state''…
This paper studies a discrete-time version of the Lucas-Uzawa endogenous growth model with physical and human capital in the presence of externalities. Existence of an optimal equilibrium is proved using tools from dynamic programming with…