Introduction to Sunspots and Lotteries

Introduction to Sunspots and Lotteries

This introduces the symposium on sunspots and lotteries. Two stochastic generalequilibrium concepts, sunspot equilibrium (SE) and lottery equilibrium (LE), are compared. It is shown that, for some general, pure-exchange economies which allow for consumption nonconvexities or moral hazards, the set of LE allocations is equivalent to the set of SE allocations provided that the randomizing device ...

Lotteries, Sunspots, and Incentive Constraints

We study a prototypical class of exchange economies with private information and indivisibilities. We establish an equivalence between lottery equilibria and sunspot equilibria and show that the welfare and existence theorems hold. To establish these results, we introduce the concept of the stand-in consumer economy, which is a standard convex, finite consumer, finite good, pure exchange econom...

Lotteries for consumers versus lotteries for firms

Prescott emphasizes similarities between lotteries that smooth nonconvexities for firms and for consumer-workers. We emphasize their differences. We also argue that models with employment lotteries that are used to generate unemployed individuals in a frictionless framework can have very different implications than models embodying frictional unemployment. As an illustration, models with employ...

Sunspots and Temperatures

Power spectrum analyses of temperature series at New York City (1822-1956), the Netherlands (1735-1944), and central England (1698-1955) show that the only significant energy in these spectrums appears at the annual period of 12 months. No significant energy was found corresponding to any known sunspot periodicity. Correlation coefficients between January and July temperatures for the years of ...

An Introduction to Sociolinguistics