On the Existence and Uniqueness of Stationary Equilibrium in Bewley Economies with Production

Omer Acikgoz

MPRA Paper from University Library of Munich, Germany

Abstract: I prove existence of stationary recursive competitive equilibrium in Bewley economies with production under specifications in which (i) utility function is allowed to be unbounded, and (ii) the underlying discrete idiosyncratic productivity process can take any form, aside from mild restrictions. Some of the intermediate results provide theoretical basis for assumptions often made in the quantitative macroeconomics literature. By providing an example, I illustrate that equilibrium is not necessarily unique, even under typical specifications of the model, and discuss the underlying reasons for multiplicity.

Keywords: Recursive Competitive Equilibrium; Bewley/Huggett/Aiyagari model; Existence; Uniqueness (search for similar items in EconPapers)
JEL-codes: C62 E00 E21 (search for similar items in EconPapers)
Date: 2015-12-30, Revised 2016-04-30
New Economics Papers: this item is included in nep-dge, nep-pr~, nep-mac and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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