Introducing assets backed by physical collateral, we extend the Cornet and De Boisdeffre (2002) model of asymmetric information to allow for default. We show that, independently of the financial-informational structure, equilibrium exists.

We consider infinite horizon economies with incomplete financial markets. Securities are in positive net supply and may be infinite-lived. We establish existence of equilibria by requiring borrowing constrains instead of portfolio restrictions..

We develop a general equilibrium model of wealth transfers in the presence of uncertain lifetimes and default. Without introducing exogenous debt constraints, agents are allowed to make collateral-backed promises at any state of their life span.

We state an infinite horizon sequential markets model with real assets in positive net supply and subject to credit risk. By introducing default-dependent borrowing constraints, we show the existence of equilibrium.

When infinite lived agents trade long-lived assets secured by durable goods, equilibrium exists without any uniform impatience requirements or additional debt constraints. Asset pricing bubbles are absent when the new endowments of durable goods are uniformly bounded away from zero. Otherwise,...

In infinite horizon incomplete market economies, Ponzi schemes are avoided and equilibrium exists when collateral repossession is the only mechanism enforcing borrowers not to entirely default on their promises. In these economies, we add default enforcement mechanisms that are effective, i.e....

The uniform impatience hypothesis, a joint requirement on endowments and preferences, was imposed in the literature to prove equilibrium existence in infinite horizon sequential economies. In this note, we characterize this assumption in terms of asymptotic properties on inter-temporal discount...