On the existence and uniqueness of stationary equilibrium in Bewley economies with production

Ömer T. Açıkgöz

Journal of Economic Theory, 2018, vol. 173, issue C, 18-55

Abstract: I prove existence of stationary recursive competitive equilibrium in Bewley economies with production under specifications in which (i) the 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 the equilibrium is not necessarily unique, even under typical specifications of the model, and discuss the underlying reasons for multiplicity.

Keywords: Bewley–Aiyagari model; Recursive competitive equilibrium (search for similar items in EconPapers)
JEL-codes: C61 C62 D31 E21 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053117301084
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:173:y:2018:i:c:p:18-55

DOI: 10.1016/j.jet.2017.10.006

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().