IDEAS home Printed from
   My bibliography  Save this paper

Government-Private Ownership Equilibrium with Incomplete Markets


  • Sunanda Roy

    () (University of Southern California)


This paper studies how financial-market incompleteness restricts the employment levels and capital use of private firms in a multi-sectoral production economy in which sectors experience idiosyncratic production shocks. In an economy in which private firms are replacing state firms as organizers of production, we show that incompleteness has the effect of perpetuating the productively inefficient state units at the cost of efficient private ones. The paper develops a general equilibrium model with incomplete markets (GEI) and private and state firms as potential producers of output and proves the existence of an equilibrium in which state firms exist with a positive size. With the help of numerical simulations, we study some of the qualitative properties of this government-private ownership equilibrium. In particular, we observe how employment levels in private firms (alternatively, state firms) vary with the number and types of financial assets traded and the agents' attitude towards risk.

Suggested Citation

  • Sunanda Roy, 1999. "Government-Private Ownership Equilibrium with Incomplete Markets," Computing in Economics and Finance 1999 153, Society for Computational Economics.
  • Handle: RePEc:sce:scecf9:153

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sce:scecf9:153. 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: (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.