Intertemporal equilibrium with heterogeneous agents, endogenous dividends and collateral constraints
نویسندگان
چکیده
We build a dynamic general equilibrium model with heterogeneous producers and financial market imperfections (collateral constraints and incompleteness). First, we prove the existence of equilibrium and provide a tractable characterization to check whether a sequence is an equilibrium. Second, we study the e↵ects of financial imperfections on economic growth and land prices. Third, we develop a theory of valuation of land by introducing the notion of endogenous land dividends (or yields) and di↵erent concepts of land-price bubbles. Some examples of bubbles are provided in economies with and without short-sales.
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