Characterisation of Generically Complete Real Asset Structures

Consider the market structures that can be used to solve the problem of allocating resources in a stochastic economy that is an economy whose characteristics depend upon time and uncertainty. Arrow-Debreu contingent markets involve trading all future goods at the initial date: the equilibria of this market structure are well understood [Debreu (1959, ch. 7)]. A second market structure consists of a system of spot markets at each date-event and a system of asset markets which permit the transfer of income among the spot markets. It is useful to distinguish two types of assets: nominal assets which promise delivery of a profile of units of account across the states of nature and real assets which promise delivery of a profile of real goods across the states. The former were first introduced by Arrow (1964): the latter were analysed by Radner (1972) and Hart (1975). What is the relation between the equilibrium allocations that arise with a system of contingent markets and those that arise with a system of (spot and)