In this paper, Anything Goes: The Sonnenschein-Mantel-Debreu theorem (following the work of Sonnenchein (1972, 1973), Mantel (1974), and Debreu (1974)), has been applied to incomplete markets, Bottazzi, J.-M. and T. Hens (1996), in order to test the Ricardian equivalence hypothesis. In the...

We propose a criterion for determining whether a local policy analysis can be made in a given equilibrium in an overlapping generations model. The criterion can be applied to models with infinite past and future as well as those with a truncated past. The equilibrium is not necessarily a steady...

When modelling the aggregate behavior of a population over long periods of time the standard approach is to consider the system as always being in equilibrium -- using averaging procedures based upon assumptions of rationality, utility-maximization and a high degree of independence amongst the...

This paper describes a general framework for equilibrium selection by tracing the graph of the quantal response equilibrium (QRE) correspondence as a function of the estimation error. If a quantal response function satisfies C2 continuity, monotonicity and cumulativity, the graph of QRE...

The paper establishes that the Thom-Boardman stratification result of singularity theory applies generically to the world of aggregate excess demand (AED) functions. In addition, if AED is analytic, then the number of Walrasian equilibria - including non-regular ones - is finite

We complement the Sonnenschein-Mantel-Debreu results by establishing that an exchange economy, i.e., preferences and endowments, that generates a given aggregate excess demand (AED) function is close to the economy that generates a perturbation of this AED. As a consequence, genericity and...

The present paper considers a class of general equilibrium economics when the primitive uncertainty model features uncertainty about continuous-time volatility. This requires a set of mutually singular priors, which do not share the same null sets. For this setting we introduce an appropriate...

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...

This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment rate) in which equilibrium selection is not conditioned on a sunspot. Instead, large enough shocks initiate unavoidable transitions from one regime to the other. The...

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...