| The dissertation consists of two essays studying incomplete financial asset markets. In Chapter 2, incomplete markets with risk and uncertainty are considered. In this model, individuals may perceive uncertainty regarding states of nature in the second period. This uncertainty is represented by a particular form of incomplete preferences. I show that there is an open set of initial endowments for which equilibrium allocations are Pareto optimal in this model, in contrast to standard results in the absence of uncertainty. In Chapter 3, the effectiveness of monetary policy in nominal asset economies is investigated. By coordinating the effects on the asset span, commodity prices, and velocities of money, monetary policy might be used to bring about Pareto improvements over equilibrium allocations. I show the generic existence of Pareto improving monetary policy in a nominal asset model. |
