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The unit root property and optimality with a continuum of states—Pure exchange

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  • Chattopadhyay, Subir

Abstract

We study general one good pure exchange stochastic overlapping generations economies with stationary Markovian uncertainty and a continuum of states for the Markov process. We show that a unit root property provides a complete characterization of the optimality properties of stationary equilibrium allocations when markets are sequentially complete and the welfare criterion is conditional Pareto optimality.

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  • Chattopadhyay, Subir, 2018. "The unit root property and optimality with a continuum of states—Pure exchange," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 105-118.
    • Handle: RePEc:eee:mateco:v:78:y:2018:i:c:p:105-118
    DOI: 10.1016/j.jmateco.2018.07.007
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    References listed on IDEAS

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