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Collateral avoids Ponzi schemes in incomplete markets


  • Pascoa, Mario Rui
  • Araújo, Aloísio Pessoa de
  • Torres-Martínez, Juan Pablo


Without introducing neither debt constraints nor transversality conditions to avoid the possibility of Ponzi schemes, we show existence of equilibrium in an incomplete markets economy with a collateral structure.

Suggested Citation

  • Pascoa, Mario Rui & Araújo, Aloísio Pessoa de & Torres-Martínez, Juan Pablo, 2001. "Collateral avoids Ponzi schemes in incomplete markets," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 419, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:epgewp:419

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