The set of sunspot equilibria in economies with incomplete financial markets: variable asset prices

Tito Pietra

Economic Theory, 2001, vol. 18, issue 3, 649-659

Abstract: I consider the set of equilibria of two-period economies with S extrinsic states of nature in the second period and I assets with linearly independent nominal payoffs. Asset prices are variable. If the number of agents is greater than (S-I), the payoff matrix is in general position and S $\ge$ 2I, the set of equilibrium allocations generically (in utility function space) contains a smooth manifold of dimension (S-1). Moreover, the map from states o f nature to equilibrium allocations (restricted to this manifold) is one-to-one at each equilibrium.

Keywords: Sunspot; equilibria. (search for similar items in EconPapers)
JEL-codes: D52 (search for similar items in EconPapers)
Date: 2001-06-11
Note: Received: February 23, 1998; revised version: June 1, 2000
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Citations: View citations in EconPapers (2)

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