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Proof of Steady-State Multiplicity in Aiyagari

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  • Kieran James Walsh

Abstract

I provide the first analytic construction of a canonical Aiyagari economy exhibiting at least three steady states. Along the way, I provide new upper and lower bounds on the stationary capital supply for the case where the net return on saving is negative. I also give parameter restrictions that guarantee the existence of a steady state with a rental rate in the neighborhood of a remarkably simple number: the capital share times the depreciation rate.

Suggested Citation

  • Kieran James Walsh, 2026. "Proof of Steady-State Multiplicity in Aiyagari," Papers 2609.03730, arXiv.org.
    • Handle: RePEc:arx:papers:2609.03730
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