On a Unique Nondegenerate Distribution of Agents in the Huggett Model
A theoretical curiosity remains in the Huggett  model as to the possible existence of a unique and degenerate stationary distribution of agent types. This coincides with the possibility that an equilibrium individual state space may turn out to be trivial in the sense that every agent never escapes the binding common borrowing constraint. In this note, we extend and reinforce the proof of Lemma 3 in Huggett . By invoking a simple comparative-static argument, we establish that Huggett's result of a unique stationary equilibrium distribution of agents must be one that is nontrivial or nondegenerate.
|Date of creation:||Jun 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186-8603|
Web page: http://cis.ier.hit-u.ac.jp/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hit:piecis:478. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library)
If references are entirely missing, you can add them using this form.