``Further Remarks on Walras' Law and Nonoptimal Equilibria''

Mark Pingle () and Leigh Tesfatsion ()

GE, Growth, Math methods from University Library of Munich, Germany

Abstract: The objective of this note is to show that the positively valued excess supplies which Aiyagari (JME, 1992) connects with Pareto inefficiency for overlapping generations economies represent an economic opportunity that can potentially be exploited by government or by a private financial intermediary through the issuance of unsecured debt. We demonstrate that, when unsecured debt is issued, Walras' Law does not fail in the sense described by Aiyagari. However, the mere issuance of unsecured debt does not ensure Pareto efficiency. We show that Pareto efficiency is achieved if and only if the opportunity to issue unsecured debt is optimally exploited, for example, by an earnings-driven private financial intermediary.

JEL-codes: C6 D5 D9 (search for similar items in EconPapers)
Pages: 10 pages
Date: 1993-12-04
Note: 10 pages, includes 1 figure, all in LaTeX
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9312/9312001.tex (application/x-tex)
https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9312/9312001.pdf (application/pdf)
https://econwpa.ub.uni-muenchen.de/econ-wp/ge/papers/9312/9312001.ps.gz (application/postscript)

Related works:
Working Paper: Further Remarks On Walras' Law And Nonoptimal Equilibria (1993)
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:wpa:wuwpge:9312001

Access Statistics for this paper

More papers in GE, Growth, Math methods from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).