• Nigar Hashimzade (office assistant), 255-5618;402 Uris Hall; shelloffice@cornell.edu
  
  
• Luca Bossi
  
  
• Luis Conraria

Topics

• Overlapping Generations:
  The OG model easily accommodates monetary phenomena. It is also the only macro model allowing for serious demography. Demography is central to contemporary macro issues such as social security, medicare, and family formation.
  
  
• Equilibrium Bank Runs:
  Our focus will be on financial intermediation in which the optimal mechanism tolerates "runs".
  
  
• Extrinsic Uncertainty:
  Arrow and Debreu tell us how the economy transmits intrinsic uncertainty. Sunspot equilibrium and lottery equilibrium explain how economies can also generate extrinsic uncertainty.

K. J. Arrow, "The Role of Securities in the Optimal Allocation of Risk-Bearing," Review of Economic Studies, April 1964, 91-96.

Yves Balasko and Karl Shell, "Lump-Sum Taxation: The Static Economy," in General Equilibrium, Growth, and Trade: The Legacy of Lionel McKenzie, II (R. Becker, M. Boldrin, R. Jones and W. Thomson, eds.) New York: Academic Press, 1993, 168-180.

James Peck, "Non-Connectedness of the Set of Equilibrium Money Prices: The Static Economy," Journal of Economic Theory, Vol. 43(2), December 1987, 348-354.

Rod Garratt, "The Connectedness of the Set of Equilibrium Money Prices Depends on the Choice of the Numeraire," Journal of Economic Theory, Vol. 56(1), February 1992, 206-217.

B. Overlapping Generations

Karl Shell and Bruce Smith, "Overlapping-Generations Model and Monetary Economics," in the New Palgrave Dictionary of Money and Finance (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 3, London: Macmillan, 1992, 104-109.

Paul A. Samuelson, "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, December 1958, 467-482.

Peter A. Diamond, "National Debt in a Neoclassical Growth Model", American Economic Review, Vol. 55(5), December 1965, 1126-1150.

Karl Shell, "Notes on the Economics of Infinity," Journal of Political Economy, Vol. 79(5), September/October 1971, 1002-1011. (Appears in Spanish as "Notas sobre las economias del infinito" (translation by M. Santos), Cuadernos Economicos de I.C.E., Vol. 35(1), 1987, 31-39.)

David Gale, "Pure Exchange Equilibrium of Dynamic Economic Models," Journal of Economic Theory, Vol. 6(1), February 1973, 12-36.

Yves Balasko and Karl Shell, "The Overlapping-Generations Model, I: The Case of Pure Exchange without Money, " Journal of Economic Theory, Vol. 23(3), December 1980, 281-306.

Yves Balasko and Karl Shell, "The Overlapping-Generations Model, II: The Case of Pure Exchange with Money," Journal of Economic Theory, Vol. 24(1), February 1981, 112-142. See also "Erratum," Journal of Economic Theory, Vol. 25(3), December 1981, 471.

Yves Balasko and Karl Shell, "Lump-Sum Taxes and Transfers: Public Debt in the Overlapping-Generations Model," in Essays in Honor of Kenneth J. Arrow, Vol. II: Equilibrium Analysis (W. Heller, R. Starr, and D. Starrett, eds.), New York: Cambridge University Press, 1986, Chapter 5, 121-153.

Karl Shell, "Monnaie et Allocation Intertemporelle," [title and abstract in French, text in English] mimeo, Séminaire d'Econométrie Roy-Malinvaud, Centre National de la Recherche Scientifique, Paris, November 21, 1977. (Forthcoming in Macroeconomic Dynamics.)

Costas Azariadis, "Self-Fulfilling Prophecies," Journal of Economic Theory, Vol. 25(3), December 1981, 380-396.

Christian Ghiglino and Karl Shell, "The Economic Effects of Restrictions on Government Budget Deficits," Journal of Economic Theory, Vol. 94(1), September 2000, 106-137.

Christian Ghiglino and Karl Shell, "The Economic Effects of Restrictions on Government Budget Deficits: Imperfect Private Credit Markets," Economic Theory.,Vol. 21, Number 2-3, March 2003, 399-421. [To be reprinted in a Springer Verlag volume edited by C.D. Aliprantis, K.J. Arrow, P.J. Hammond, F. Kubler, H.M. Wu, and N.C. Yannelis.]

David de la Croix and Philippe Michel, A Theory of Economic Growth: Dynamics and Policy in Overlapping Generations, Cambridge University Press, 2002, ISBN 0 521 80642 9 hardback; ISBN 0 521 00115 3 paperback.

C. Sunspots

Karl Shell, "Sunspot Equilibrium," in The New Palgrave: A Dictionary of Economics (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 4, New York: Macmillan, 1987, 549-551.

Karl Shell and Bruce Smith, "Sunspot Equilibrium", in the New Palgrave Dictionary of Money and Finance (J. Eatwell, M. Milgate, and P. Newman, eds.), Vol. 3, London: Macmillan, 601-605.

Karl Shell, "Monnaie et Allocation Intertemporelle," [title and abstract in French, text in English] mimeo, Séminaire d'Econométrie Roy-Malinvaud, Centre National de la Recherche Scientifique, Paris, November 21, 1977. (Forthcoming in Macroeconomic Dynamics.)

David Cass and Karl Shell, "Do Sunspots Matter?" Journal of Political Economy, Vol. 91(2), April 1983, 193-227.

Costas Azariadis, "Self-Fulfilling Prophecies," Journal of Economic Theory, Vol. 25(3), December 1981, 380-396.

Costas Azariadis and Roger Guesnerie, "Sunspots and Cycles", Review of Economic Studies, Vol. 53(5), October 1986, 725-738.

Yves Balasko, "Extrinsic Uncertainty Revisited", Journal of Economic Theory, Vol. 31(2), December 1983, 203-210.

James Peck, "On the Existence of Sunspot Equilibria in an Overlapping Generations Model," Journal of Economic Theory, Vol. 44(1), February 1988, 19-42.

James Peck and Karl Shell, "Market Uncertainty: Correlated and Sunspot Equilibria in Imperfectly Comptetitive Economies," The Review of Economic Studies, Vol. 58(5), October 1991, 1011-1019.

Karl Shell and Randall Wright, "Indivisibilities, Lotteries and Sunspot Equilibria," Economic Theory, Vol. 3(1), January 1993, 1-17.

David Cass and Karl Shell, "Sunspot Equilibrium in an Overlapping-Generations Economy with an Idealized Contingent-Commodities Market," Part 1, Chapter 1 in Economic Complexity: Chaos, Sunspots, Bubbles, and Nonlinearity (W. Barnett, J. Geweke, and K. Shell, eds.), New York: Cambridge University Press, 1989, 3-20.

Edward Prescott and Robert Townsend, "Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard," Econometrica, Vol. 52(1), January 1984, 21-45.

Edward Prescott and Robert Townsend, "General Competitive Analysis in an Economy with Private Information," International Economic Review, Vol. 25(1), February 1984, 1-20.

Rod Garratt, Todd Keister, Cheng-Zhon Qin, and Karl Shell, "Equilibrium Prices when the Sunspot Variable is Continuous," Journal of Economic Theory, Vol. 107(1), November 2002, 11-38. doi:10.1006/jeth.1999.2634

Aditya Goenka and Karl Shell, "When Sunspots Don't Matter," Economic Theory, Vol. 9(1), January 1997, 169-178.

Aditya Goenka and Karl Shell, "Robustness of Sunspot Equilibria," Economic Theory, Vol. 10(1), July 1997, 79-98.

James Peck and Karl Shell, "Bank Portfolio Restrictions and Equilibrium Bank Runs," Working Paper 99-07, Center for Analytical Economics, Cornell University, Ithaca, July 1999.

Timothy J. Kehoe, David K. Levine, Edward C. Prescott, "Lotteries, Sunspots, and Incentive Constraints," Journal of Economic Theory, Vol. 107(1), November 2002, 39-69. doi:10.1006/jeth.2001.2792.

Rod Garratt, Todd Keister, and Karl Shell, "Comparing Sunspot Equlibrium and Lottery Equilibrium Allocations: The Finite Case," Incomplete Markets Workshop, SUNY Stony Brook, July 2001.

D. Bank Runs

Douglas W. Diamond and Philip H Dybvig. "Bank Runs, Deposit Insurance, and Liquidity," Journal of Political Economy 91 (June 1983): 401-19.

Edward J Green and Ping Lin. "Diamond and Dybvig's Classic Theroy of Financial Intermediation: What's Missing?" Fed. Reserve Bank Minneapolis Q. Rev. 24 (Winter 2000): 3-13.

Neil Wallace. "Another Attempt to Explain an Illiquid Banking System: The Diamond and Dybvig Model with Sequential Service Taken Seriously." Fed. Reserve Bank Minneapolis Q. Rev. 12 (Fall 1988): 3-16.

Neil Wallace. "A Banking Model in Which Partial Suspension is Best." Fed. Reserve Bank Minneapolis Q. Rev. 14 (Fall 1990): 11-23.

James Peck and Karl Shell. "Bank Portfolio Restrictions and Equilibrium Bank Runs." Working Paper no. 99-07. Ithaca, NY.: Cornell Univ., Center Analytic Econ., July 1999.

James Peck and Karl Shell. "Equilibrium Bank Runs," Journal of Political Economy, Vol. 111, No. 1, February 2003, 103-123.