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New Results in Recursive Contract Theory

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  • Ramon Marimon

    (European University Institute and UPF-BarcelonaGSE)

Abstract

Presentation of some new results showing how, under very general conditions, the recursive saddle-point method, pioneered by Marcet and Marimon, delivers the appropriate solution for contracting problems with intertemporal incentive constraints, with or without unique solutions. These results summarize work from: Marimon and Marcet "Recursive Contracts" (2011) and Marimon, Messner and Pavoni "Solving Recursive Contracts with Non-unique Solutions" (2011), as well as from ongoing work with Jan Werner: "On the Envelope Theorem without Differentiability" (2010).

Suggested Citation

  • Ramon Marimon, 2011. "New Results in Recursive Contract Theory," 2011 Meeting Papers 752, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:752
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    File URL: https://economicdynamics.org/meetpapers/2011/paper_752.pdf
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    References listed on IDEAS

    as
    1. Lars Ljungqvist & Thomas J. Sargent, 2004. "Recursive Macroeconomic Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026212274x, February.
    2. Ezra Friedman, 1998. "Risk Sharing and the Dynamics of Inequality," Discussion Papers 1235, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Patrick J. Kehoe & Fabrizio Perri, 2002. "International Business Cycles with Endogenous Incomplete Markets," Econometrica, Econometric Society, vol. 70(3), pages 907-928, May.
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    Cited by:

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    11. Sarolta Laczo & Arpad Abraham, 2012. "Efficient Risk Sharing with Limited Commitment and Hidden Saving," 2012 Meeting Papers 680, Society for Economic Dynamics.

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