Arrow's equivalency theorem in a model with neoclassical firms

Svetlana Boyarchenko ()

Economic Theory, 2004, vol. 23, issue 4, pages 739-775

Abstract: In this paper we consider a two-period general equilibrium model with uncertainty and real assets as financial instruments. The novelty of the analysis is that real assets are the stocks of neoclassical firms, so that both returns and yields depend on anticipated spot goods prices (and, of course, the yield matrix may change rank with prices). Assuming that financial markets are potentially complete, we establish generic existence of financial equilibrium and prove that there exists a dense set of economies such that financial equilibria are efficient. Copyright Springer-Verlag Berlin/Heidelberg 2004

Keywords: Financial equilibrium; Potentially complete financial markets. (search for similar items in EconPapers)
Date: 2004

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Working Paper: Arrow's Equivalency Theorem in a Model with Neoclassical Firms (2001)
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