Arbitrage and Equilibrium in Economies with Externalities
AbstractWe introduce consumption externalities into a general equilibrium model with arbitrary consumption sets. To treat the problem of existence of equilibrium, a condition of no unbounded arbitrage, extending the condition of Page (1987) and Page and Wooders (1993, 1996) is defined. It is proven that this condition is sufficient for the existence of an equilibrium and both necessary and sufficient for compactness of the set of rational allocations.
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 588.
Length: 15 pages
Date of creation: 2001
Date of revision:
CONSUMPTION ; EXTERNALITIES ; ARBITRAGE;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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