On the pseudo-equilibrium manifold in semi-algebraic economies with real financial assets
AbstractThe aim of this paper is to prove that if the consumption set of an economy with incomplete financial markets is semi-algebraic, then the corresponding pseudo-equilibrium manifold is also semi-algebraic. For this, we proceed by constructing an incomplete financial economy with real assets and semi-algebraic utility functions. Then, we show that the spot-equilibrium set and the pseudo-equilibrium set are smooth semi-algebraic manifolds. We extent this results by showing that the pseudo-equilibrium natural projection is a semi-algebraic diffeomorphism in each regular point of the semi-algebraic pseudo-equilibrium manifold. It is directly related with the local determinacy of pseudo-equilibrium.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 54297.
Date of creation: 09 Mar 2014
Date of revision:
semi-algebraic; finance; spot-equilibrium; pseudo-equilibrium;
Find related papers by JEL classification:
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-22 (All new papers)
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