Mr. Dirk Krueger, Professor of Economics and Director of graduate studies at the University of Pennsylvania, visited Mannheim in June 2012. Besides other topics, his research analyzes inequality and risk-sharing. Please find more details about Mr. Krueger on his personal website.
He taught a course consisting of three lectures on “Limited Contract Enforcement in Macroeconomics” on June 18, June 19 and June 20.
The course provided an overview of macroeconomic research on limited contract enforcement. The course began with a discussion of stylized facts that motivate the construction of quantitative macroeconomics models with heterogeneous agents. After a brief discussion of standard complete-market models and standard exogenous incomplete-market
models, the main focus of the remainder of the lectures was on models in which markets are endogenously incomplete due to the presence of incomplete enforcement of risk sharing contracts. A simple example with two types of households was given where the equilibrium allocation could be characterized analytically. Models with a continuum of households and non-degenerate consumption distributions have been discussed. Approaches for the computations of recursive equilibria in these models were given, and their empirical evaluations relative to micro data on consumption, wealth and asset
prices have been presented.