General Equilibrium with Endogenous Trading Constraints

Sebastián Cea and Juan Pablo Torres-Martinez

MPRA Paper from University Library of Munich, Germany

Abstract: We build a general equilibrium model where agents are subject to endogenous trading constraints, making the access to financial trade dependent on prices and consumption decisions. Besides, our framework is compatible with the existence of endogenous financial segmentation and credit markets' exclusion. Two results of equilibrium existence are shown. In the first one, we assume individuals can super-replicate financial payments buying durable commodities and investing in assets that give liquidity to all agents. In the second result, under strict monotonicity of preferences, we suppose there are agents that may compensate with increments in present demand the losses of well-being generated by reductions of future consumption.

Keywords: Incomplete Markets; General Equilibrium; Endogenous Trading Constraints (search for similar items in EconPapers)
JEL-codes: C62 D52 D53 G1 (search for similar items in EconPapers)
Date: 2014-04
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 (8)

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Related works:
Journal Article: General equilibrium with endogenous trading constraints (2018)
Working Paper: General Equilibrium with Endogenous Trading Constraints (2018)
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Working Paper: General Equilibrium with Endogenous Trading Constraints (2018)
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Working Paper: General Equilibrium with Endogenous Trading Constraints (2016)
Working Paper: General equilibrium with endogenous trading constraints (2016)
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