On equilibrium existence in infinite horizon economies

Emma Moreno-García and Juan Pablo Torres-Martinez

Working Papers from University of Chile, Department of Economics

Abstract: In sequential economies with finite or infinite-lived real assets in positive net supply, we introduce constraints on the amount of borrowing in terms of the market value of physical endowments. We show that, when utility functions are either unbounded and separable in states of nature or separable in commodities, these borrowing constraints not only preclude Ponzi schemes but also induce endogenous Radner bounds on short-sales. Therefore, we obtain existence of equilibrium. Moreover, equilibrium also exists when both assets are numerarie and utility functions are quasilinear in the commodity used as numerarie.

Keywords: Equilibrium; Infinite horizon incomplete markets; Infinite-lived real assets. (search for similar items in EconPapers)
Pages: 19 pages
Date: 2010-07
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.econ.uchile.cl/uploads/publicacion/c7f4 ... 111930c045cff3de.pdf (application/pdf)

Related works:
Journal Article: Equilibrium existence in infinite horizon economies (2012)
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:udc:wpaper:wp315

Access Statistics for this paper

More papers in Working Papers from University of Chile, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mohit Karnani ().