in Economics at Universidad Nacional de La Plata in 1989 and his Ph.D. from the University of Minnesota in 1994.
[4] Fernando Alvarez's most influential contribution seems to be his work with Urban Jermann (Wharton) on endogenously incomplete markets.
They show how the limited commitment model of Timothy Kehoe and David Levine and also of Narayana Kocherlakota can be decentralized with certain borrowing constraints.
They also showed how this model could explain some feature of asset prices, such as the equity premium.
Fernando Alvarez has also presented a new estimate of the welfare cost of business cycles, which is based on observed asset prices (with Urban Jermann).