Sunspots and Incomplete Financial Markets: The General Case.

This paper examines the effects of extrinsic uncertainty or sunspots on competitive equilibrium when financial markets are incomplete. For the canonical two-period, pure-exchange model with bonds (or so-called "nominal assets," yielding overall returns specified in units of account, and including pure inside money), the following result is established: Generically in endowments, if there are "S" sunspot states in the second period, but only 0

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Year of publication:	1992
Authors:	Cass, David
Published in:	Economic Theory. - Springer. - Vol. 2.1992, 3, p. 341-58
Publisher:	Springer

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005155385