New research reveals impact of incomplete markets on economic equilibrium.
The article discusses how financial markets affect the overall balance of the economy. It looks at situations where markets are not complete, meaning some assets are missing. The researchers explore how this impacts the economy's stability and efficiency. They find that the type of financial assets available, like real or nominal securities, can change how the economy behaves. In particular, using nominal securities can lead to models that focus on money and its effects on the economy.