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On existence and bubbles of Ramsey equilibrium with borrowing constraints

Robert Becker, Stefano Bosi (), Cuong Le van () and Thomas Seegmuller ()
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Stefano Bosi: EPEE - University of Evry

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We study the existence of equilibrium and rational bubbles in a Ramsey model with heterogeneous agents, borrowing constraints and endogenous labor. Applying a 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

Keywords: Existence of equilibrium; bubbles; Ramsey model; heterogeneous agents; borrowing constraint; endogenous labor (search for similar items in EconPapers)
JEL-codes: C62 D31 D91 G10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mic
Date: 2014-03
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ftp://mse.univ-paris1.fr/pub/mse/CES2014/14040.pdf (application/pdf)

Related works:
Journal Article: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2015) Downloads
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2015)
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014) Downloads
Working Paper: On existence and bubbles of Ramsey equilibrium with borrowing constraints (2014) Downloads
Working Paper: On Existence and Bubbles of Ramsey Equilibrium with Borrowing Constraints (2013) Downloads
Working Paper: On Existence and Bubbles of Ramsey Equilibrium with Borrowing Constraints (2012) Downloads
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