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Incomplete markets in infinite horizon : debt constraints versus node prices

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  • Florenzano, Monique
  • Gourdel, Pascal

Abstract

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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Suggested Citation

  • 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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    File URL: http://www.cepremap.fr/depot/couv_orange/co9329.pdf
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    References listed on IDEAS

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    1. Florenzano, Monique & Gourdel, Pascal, 1994. "T-period economies with incomplete markets," Economics Letters, Elsevier, vol. 44(1-2), pages 91-97.
    2. Brown, Donald J & Lewis, Lucinda M, 1981. "Myopic Economic Agents," Econometrica, Econometric Society, vol. 49(2), pages 359-368, March.
    3. Manuel S. Santos & Michael Woodford, 1997. "Rational Asset Pricing Bubbles," Econometrica, Econometric Society, vol. 65(1), pages 19-58, January.
    4. Levine, David K. & Zame, William R., 1996. "Debt constraints and equilibrium in infinite horizon economies with incomplete markets," Journal of Mathematical Economics, Elsevier, vol. 26(1), pages 103-131.
    5. Hernandez D.A. & Santos, M.S., 1991. "Incomplete Financial Markets in Infinite Horizon Economies," Working papers 9108, Wisconsin Madison - Social Systems.
    6. Alejandro Hernandez & Manuel Santos, 1994. "Competitive Equilibria for Infinite-Horizon Economies with Incomplete Markets," Working Papers 9407, Centro de Investigacion Economica, ITAM.
    7. 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.
    8. 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.
    9. BEWLEY, Truman F., 1972. "Existence of equilibria in economies with infinitely many commodities," LIDAM Reprints CORE 122, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. 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.
    2. 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.
    3. Levine, David K. & Zame, William R., 1996. "Debt constraints and equilibrium in infinite horizon economies with incomplete markets," Journal of Mathematical Economics, Elsevier, vol. 26(1), pages 103-131.
    4. 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.
    5. Aloisio Araujo & Paulo K. Monteiro & M´rio Rui P´ascoa, 1996. "Infinite Horizon Incomplete Markets With A Continuum Of States," Mathematical Finance, Wiley Blackwell, vol. 6(2), pages 119-132, April.
    6. Duffie, Darrell, 1996. "Incomplete security markets with infinitely many states: An introduction," Journal of Mathematical Economics, Elsevier, vol. 26(1), pages 1-8.
    7. Bejan, Camelia & Bidian, Florin, 2010. "Limited enforcement, bubbles and trading in incomplete markets," MPRA Paper 36819, University Library of Munich, Germany, revised 20 Feb 2012.
    8. Jean-Marc Tallon, 1995. "Théorie de l'équilibre général avec marchés financiers incomplets," Revue Économique, Programme National Persée, vol. 46(5), pages 1207-1239.

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