On existence and bubbles of Ramsey equilibrium with borrowing constraints

Robert Becker, Stefano Bosi (), Cuong Van () and Thomas Seegmuller

Economic Theory, 2015, vol. 58, issue 2, 329-353

Abstract: We study the existence of equilibrium and rational bubbles in a Ramsey model with heterogeneous agents, borrowing constraints and endogenous labor. Applying Kakutani’s fixed-point theorem, we prove the existence of equilibrium in a time-truncated bounded economy. A common argument shows this solution to be an equilibrium for any unbounded economy with the same fundamentals. Taking the limit of a sequence of truncated economies, we eventually obtain the existence of equilibrium in the Ramsey model. In the second part of the paper, we address the issue of rational bubbles and we prove that they never occur in a productive economy à la Ramsey. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Existence of equilibrium; Bubbles; Ramsey model; Heterogeneous agents; Borrowing constraint; Endogenous labor; C62; D31; D91; G10 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00199-014-0810-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014)
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014)
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014)
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014)
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2013)
Working Paper: On Existence and Bubbles of Ramsey Equilibrium with Borrowing Constraints (2013)
Working Paper: On Existence and Bubbles of Ramsey Equilibrium with Borrowing Constraints (2013)
Working Paper: On Existence and Bubbles of Ramsey Equilibrium with Borrowing Constraints (2012)
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:spr:joecth:v:58:y:2015:i:2:p:329-353

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-014-0810-6

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().