In a game with rational expectations, individuals simultaneously refine their information with the information revealed by the strategies of other individuals. At a Nash equilibrium of a game with rational expectations, the information of individuals is essentially symmetric: the same profile of...

This paper provides a general overview of the literature on the core of an exchange economy with asymmetric information. Incentive compatibility is emphasized in studying core concepts at the ex ante and interim stage. The analysis includes issues of non-emptiness of the core as well as core...

Equilibrium paths in economies of overlapping generations depend on the frequency of trade. In a logarithmic example, determinacy obtains as the frequency of trades tends to infinity or trade occurs in continuous time. If time extends infinitely into the infinite past as well as into the...

When the asset market is incomplete, competitive equilibria are constrained suboptimal, and there is scope for Pareto improving interventions. Price regulation, which operates anonymously, on market variables, can be such a Pareto improving policy, even when the welfare effects of rationing are...

At arbitrary prices of commodities and assets, fix-price equilibria exist under weak assumptions: endowments need not satisfy an interiority condition, utility functions need only satisfy a very weak monotonicity requirement, and the asset return matrix allows for redundant assets. Prices of...

Monetary and fiscal policy do not determine the stochastic path of prices: in the absence of financial policy, there remains indeterminacy indexed by an arbitrary probability measure over the set of states of the world. With an interest rate policy, and only if the asset market is complete,...

We consider a cash-in-advance economy under uncertainty in which monetary policy sets either short-term nominal interest rates or money supplies. We show that both the initial price level and the distribution of the inflation rate up to its expectation are indeterminate, regardless of the degree...

Money, which provides liquidity, is distinct from debt. The introduction of a bank that issues money in exchange for debt and pays out its profit as dividend to shareholders modifies the model of overlapping generations. Monetary policy can set, alternatively, the nominal rate of interest or the...

Is general equilibrium theory empirically testable? Our perspective on this question differs from the standard, Sonnenschein-Debreu-Mantel (SDM) viewpoint. While SDM tradition considers aggregate (excess) demand as a function of prices, we assume that what is observable is the equilibrium price...

When the asset market is incomplete, there typically exist taxes on trades in assets and a redistribution of revenue in the asset market that are Pareto improving. The policy is anonymous, it economizes on complexity, and it results in ex post Pareto optimal allocations; it is publicly announced...