EconPapers    
Economics at your fingertips  
 

On existence, efficiency and bubbles of Ramsey equilibrium with borrowing constraints

Robert Becker, Stefano Bosi (), Cuong Le Van () and Thomas Seegmuller ()
Additional contact information
Stefano Bosi: EPEE, University of Evry
Cuong Le Van: CES, CNRS, VCREME and Hanoi WRU
Thomas Seegmuller: GREQAM, Aix-Marseille University

No 2012-001, CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington

Abstract: We address the fundamental issues of existence and efficiency of a Ramsey equilibrium with heterogenous discounting, elastic labor supply and borrowing constraints. In the first part, we prove the equilibrium existence in a truncated bounded economy through a fixed-point argument by Gale and Mas-Colell (1975). This equilibrium is also an equilibrium of any unbounded economy with the same fundamentals. The proof of existence is eventually given for an infinite-horizon economy as a limit of a sequence of truncated economies. Our general approach is suitable for applications to other models with different market imperfections. In the second part, we show the impossibility of bubbles in a productive economy and we give sufficient conditions for equilibrium efficiency.

Pages: 42 pages
Date: 2012-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://caepr.indiana.edu/RePEc/inu/caeprp/caepr2012-001.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: On existence, effciency and bubbles of Ramsey equilibrium with borrowing constraints (2013) Downloads
Working Paper: On existence, efficiency and bubbles of Ramsey equilibrium with borrowing constraints (2013) Downloads
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:inu:caeprp:2012001

Access Statistics for this paper

More papers in CAEPR Working Papers from Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington Contact information at EDIRC.
Bibliographic data for series maintained by Center for Applied Economics and Policy Research ().

 
Page updated 2025-03-30
Handle: RePEc:inu:caeprp:2012001