On Characterizing Equilibria of Economies with Externalities and Taxes as Solutions to Optimization Problems.
We characterize equilibria of general equilibrium models with externalities and taxes as solutions to optimization problems. This characterization is similar to Negishi's characterization of equilibria of economies without externalities or taxes as solutions to social planning problems. It is often useful for computing equilibria or deriving their properties. Frequently, however, finding the optimization problem that a particular equilibrium solves is difficult. This is especially true in economies with multiple equilibria. In a dynamic economy with externalities or taxes there may be a robust continuum of equilibria even if there is a representative consumer. This indeterminacy of equilibria is closely related to that in overlapping generations economies.
Year of publication: |
1992
|
---|---|
Authors: | Kehoe, Timothy J ; Levine, David K ; Romer, Paul M |
Published in: |
Economic Theory. - Springer. - Vol. 2.1992, 1, p. 43-68
|
Publisher: |
Springer |
Saved in:
Saved in favorites
Similar items by person
-
Debt Constrained Asset Markets
Kehoe, Timothy J, (1993)
-
Bankruptcy and Collateral in Debt Constrained Models
Kehoe, Timothy J, (2006)
-
Comparative Statics and Perfect Foresight in Infinite Horizon Economies
Kehoe, Timothy J, (1985)
- More ...