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We address the issues of existence of Ramsey equilibrium under bor- rowing constraints and occurrence of rational bubbles. First, we consider a time-truncated economy. Since the feasible allo- cations sets of our economy are uniformly bounded, we prove that there exists an equilibrium in a...
Persistent link: https://www.econbiz.de/10010754732
We address the fundamental issues of existence and efficiency of an equilibrium in a Ramsey model with many agents, where agents have heterogenous discounting, elastic labor supply and face borrowing con- straints. The existence of rational bubbles is also tackled. In the first part, we prove...
Persistent link: https://www.econbiz.de/10010754729