A characterization of inefficiency in stochastic overlapping generations economies
نویسندگان
چکیده
منابع مشابه
A characterization of inefficiency in stochastic overlapping generations economies
In this paper, we provide a characterization of interim inefficiency in stochastic economies of overlapping generations under possibly sequentially incomplete markets. With respect to the established body of results in the literature, we remove the hypothesis of two-period horizons, by considering longer, though uniformly bounded, horizons for generations. The characterization exploits a suitab...
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Aiyagari (1992) shows that equilibria are nonoptimal for an overlapping generations economy if and only if Walras’ Law fails. We demonstrate that this failure represents an earnings opportunity exploitable by unsecured debt issue. When unsecured debt is issued, Walras’ Law holds. JEL Classification: D5, D6, D9
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2008
ISSN: 0022-0531
DOI: 10.1016/j.jet.2008.01.002