Luque, J. (2013). Heterogeneous Tiebout Communities with Private Production and Anonymous Crowding.
Regional Science and Urban Economics
This paper provides a general equilibrium model where jurisdictions offer not only public goods, but also job opportunities. In a context of multiple types of consumers, labor complementarities, and anonymous crowding, heterogeneous populated communities form in equilibrium with an endogenous wage system that is labor-type and jurisdiction-type dependent. Equilibrium jurisdiction structures depend on the relative scarcity of labor types, unlike the situation in Berglas' (1976) partial equilibrium analysis. For a large economy, we prove that equilibrium exists and that the set of equilibria is equivalent to the core.
(43), 117-123. doi: 10.1016/j.regsciurbeco.2012.05.007.
Bottazzi, J., Luque, J., & Pascoa, M. (2012). Securities Market Theory: Possession, Repo and Re-hypothecation.
Journal of Economic Theory
By introducing repo markets we understand how agents need to borrow issued securities before shorting them: (re)-hypothecation is at the heart of shorting. Non-negative amounts of securities in the box of an agent (amounts borrowed or owned but not lent on) can be sold, and recursive use of securities as collateral allows agents to leverage their positions. A binding box constraint induces a liquidity premium: the repo rate becomes special and the security price higher than expected discounted cash-flows. Existence of equilibrium is guaranteed under limited re-hypothecation, a situation secured by (current or proposed) institutional arrangements.
(147), 477-500. doi: 10.1016/j.jet.2010.11.004.