EconPapers    
Economics at your fingertips  
 

Are Sunspots Inevitable?

Christophe Prechac and Aditya Goenka ()

No 786, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: This paper examines the welfare of consumers in an incomplete markets economy with extrinsic uncertainty. It is shown that the utility of one consumer may be minimized at the Walrasian allocation relative to all other equilibrium allocations for a given security structure. Thus, this consumer will have no incentive to trade the new securities if they complete the insurance markets.

Keywords: Sunspot equilibrium; incomplete markets; financial innovation; welfare analysis. (search for similar items in EconPapers)
JEL-codes: D52 E32 G10 D60 (search for similar items in EconPapers)
Date: 2004-08-11
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://repec.org/esFEAM04/up.3694.1082347741.pdf (application/pdf)

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:ecm:feam04:786

Access Statistics for this paper

More papers in Econometric Society 2004 Far Eastern Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().

 
Page updated 2020-03-29
Handle: RePEc:ecm:feam04:786