Excess demand functions with incomplete markets - a global result
نویسنده
چکیده
The purpose of this paper is to give a global characterization of excess demand functions in a two period exchange economy with incomplete real asset markets. We show that continuity, homogeneity and Walras’ law characterize the aggregate excess demand functions on any compact price set which maintains the dimension of the budget set. JEL classification: D52, C62.
منابع مشابه
An Extension of Mantel (1976) to Incomplete Markets
In the incomplete markets model with numeraire asset and a single consumption good we show that, even with homothetic preferences, on compact sets of prices Continuity, Walras’ identity and Homogeneity characterize the properties of market excess demand. This result is proved by an extension of Mantel (1976) to the case of incomplete markets. Journal of Economic Literature Class. No. : D 52, C ...
متن کاملExcess demand function around critical prices in incomplete markets
We show that the aggregate excess demand function in an economy with incomplete real asset markets can be characterized by Walras’ law, homogeneity, and continuity around critical prices that cause one-dimensional drop of the dimension of the budget set. © 2009 Elsevier B.V. All rights reserved.
متن کاملPrice Discovery In Financial Markets: Analysis Of Two Systems Of Differential Equations
We present two systems of differential equations implied by two different models of price discovery. One is the basic Walrasian model, where prices adjust to a security’s own excess demand. The basic Walrasian model does not feature cross-security effects (the price of one security reacts to excess demand in another). The alternative is a model where demand adjusts autonomously to perceived exc...
متن کاملThe Excess Liquidity of the Open Economy and its Management
The excess liquidity of the open economy has become one main factor influencing the monetary markets, financial markets and even the whole macroeconomic. In era of the post-crisis, many countries have implemented the loose monetary policies, especially the quantitative easing policy in the U.S. which worsened the situation of the excess liquidity. Under this background, it will be more meaning...
متن کاملMonetary Policy Analysis in an Open Economy with Incomplete Asset Markets
A dynamic stochastic general equilibrium monetary model with incomplete asset markets, nominal price rigidities and market imperfections is developed to shed light on the role of exchange rate and its relation with current account dynamics in the formulation of monetary policy. In the recent literature, labelled as new open economy macroeconomics (NOEM), the dynamics of current account do not m...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید
ثبت ناماگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید
ورودعنوان ژورنال:
- J. Economic Theory
دوره 111 شماره
صفحات -
تاریخ انتشار 2003