Competitive Equilibria of Economies with a Continuum of Consumers and Aggregate Shocks

Jianjun Miao

No 460, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: This paper studies competitive equilibria of a production economy with aggregate productivity shocks. There is a continuum of consumers who face borrowing constraints and individual labor endowment shocks. The dynamic economy is described in terms of sequences of aggregate distributions. The existence of sequential competitive equilibria is proven and a recursive characterization is established. In particular, it is shown that for any sequential competitive equilibrium, there exists a payoff equivalent sequential competitive equilibrium that is generated by a suitably defined recursive equilibrium with state variables including continuation value.

Keywords: competitive equilibrium; recursive equilibrium; aggregate distribution; heterogeneity; incomplete markets (search for similar items in EconPapers)
JEL-codes: D50 D52 E20 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2004-12
New Economics Papers: this item is included in nep-dge and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Economic Theory 128 (2006), 274-298

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Related works:
Journal Article: Competitive equilibria of economies with a continuum of consumers and aggregate shocks (2006)
Working Paper: Competitive Equilibria of Economies with a Continuum of Consumers and Aggregate Shocks (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:460

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