In this paper, we provide a set of sufficient conditions under which recursive competitive equilibrium exist and are unique for a large class of distorted dynamic equilibrium models with capital and elastic labor supply. We develop a monotone map approach to the problem. The class of economies...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...

Using an overlapping generations model, this paper describes interactions between nai͏̈ve and sophisticated hyperbolic discounters in general equilibrium. The nai͏̈fs, who overestimate their future propensity to save and hence over-forecast the future equilibrium asset prices, are exploited...

Using an overlapping generations model, this paper describes interactions between nai͏̈ve and sophisticated hyperbolic discounters in general equilibrium. The nai͏̈fes, who overestimate their future propensity to save and hence over-forecast the future equilibrium asset prices, are exploited...

This paper examines a dynamic general equilibrium model with supply friction. With or without friction, the competitive equilibrium is efficient. Without friction, the market price is completely determined by the marginal production cost. If friction is present, no matter how small, then the...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...

In the present paper a tractable two-sector neo-classical growth model with heterogeneous agents is considered. The local dynamic properties of the equilibrium path are analyzed in relation with the underlying characteristics of the economy. In particular, the existence of fluctuations is...

The present paper makes a contribution to fill in a gap left open by dynamic theory and evolutionary economics as well. While the "closed loop" dynamic theory has explanation power in analyzing evolving economic systems at the price of neglecting the possible occurrence of non anticipated...

Equilibrium models with heterogeneous agents and aggregate uncertainty are difficult to analyze since policy functions and market prices depend on the cross-sectional distribution over agents' state variables which is generally a high-dimensional object. This paper develops and applies a general...