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Incomplete markets in infinite horizon : debt constraints versus node prices


  • Florenzano, Monique
  • Gourdel, Pascal


The general equilibrium model with incomplete markets is here extended to infinite horizon economies populated. by a finite number of infinitely-lived agents. The crucial issue which divides the infinite horizon setting from the finite horizon setting is in the nature of borrowing constaints which added to spot constraints define a plausible budget set for individual agents. The paper relates seyen altemative definitions of equilibrium and states corresponding equilibrium existence theorems when assets are one-period and purely financial.
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  • Florenzano, Monique & Gourdel, Pascal, 1993. "Incomplete markets in infinite horizon : debt constraints versus node prices," CEPREMAP Working Papers (Couverture Orange) 9329, CEPREMAP.
  • Handle: RePEc:cpm:cepmap:9329

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    References listed on IDEAS

    1. Brown, Donald J & Lewis, Lucinda M, 1981. "Myopic Economic Agents," Econometrica, Econometric Society, vol. 49(2), pages 359-368, March.
    2. Manuel S. Santos & Michael Woodford, 1997. "Rational Asset Pricing Bubbles," Econometrica, Econometric Society, vol. 65(1), pages 19-58, January.
    3. Florenzano, Monique & Gourdel, Pascal, 1994. "T-period economies with incomplete markets," Economics Letters, Elsevier, vol. 44(1-2), pages 91-97.
    4. Alejandro Hernandez & Manuel Santos, 1994. "Competitive Equilibria for Infinite-Horizon Economies with Incomplete Markets," Working Papers 9407, Centro de Investigacion Economica, ITAM.
    5. Mas-Colell, Andreu & Zame, William R., 1991. "Equilibrium theory in infinite dimensional spaces," Handbook of Mathematical Economics,in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 34, pages 1835-1898 Elsevier.
    6. Bewley, Truman F., 1972. "Existence of equilibria in economies with infinitely many commodities," Journal of Economic Theory, Elsevier, vol. 4(3), pages 514-540, June.
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    Cited by:

    1. Robert Becker & Stefano Bosi & Cuong Van & Thomas Seegmuller, 2015. "On existence and bubbles of Ramsey equilibrium with borrowing constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(2), pages 329-353, February.
    2. Kevin Huang & Jan Werner, 2004. "Implementing Arrow-Debreu equilibria by trading infinitely-lived securities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(3), pages 603-622, October.
    3. Brangewitz, Sonja & Giraud, Gael, 2016. "Learning in Infinite Horizon Strategic Market Games with Collateral and Incomplete Information," Center for Mathematical Economics Working Papers 456, Center for Mathematical Economics, Bielefeld University.
    4. Emma Moreno-García & Juan Torres-Martínez, 2012. "Equilibrium existence in infinite horizon economies," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 11(2), pages 127-145, August.
    5. repec:ipg:wpaper:201404 is not listed on IDEAS
    6. BLOISE, Gaetano & DRÈZE, Jacques & POLEMARCHAKIS, Heracles, 2002. "Money and indeterminacy over an infinite horizon," CORE Discussion Papers 2002021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Robert Becker & Stefano Bosi & Cuong Le Van & Thomas Seegmuller, 2012. "On existence, efficiency and bubbles of Ramsey equilibrium with borrowing constraints," Caepr Working Papers 2012-001, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    8. repec:ipg:wpaper:2013-004 is not listed on IDEAS
    9. Martins-da-Rocha, Victor Filipe & Vailakis, Yiannis, 2010. "Competitive equilibria in infinite-horizon collateralized economies with default penalties," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 703, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    10. Rubén Poblete-Cazenave & Juan Torres-Martínez, 2013. "Equilibrium with limited-recourse collateralized loans," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(1), pages 181-211, May.
    11. repec:ipg:wpaper:4 is not listed on IDEAS

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