Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2002-09-04
Number: 02-085/2
Author-Name: Olivier F. Morand
Author-Email: morand@uconnvm.uconn.edu
Author-Workplace-Name: University of Connecticut
Author-Name: Kevin L. Reffett
Author-Email: kevin.reffett@asu.edu
Author-Workplace-Name: Arizona State University
Title: Existence and Uniqueness of Equilibrium in Nonoptimal Unbounded Infinite Horizon Economies
Abstract: In applied work in macroeconomics and finance, nonoptimal infinite horizon economies are often studied in which the state-space is unbounded. Important examples of such economies are single-sector growth models with production externalities, valued fiat money, monopolistic competition, and/or distortionary government taxation. Although sufficient conditions for existence and uniqueness of Markovian equilibrium are weIl known for the compact state space case, no similar sufficient conditions exist for unbounded growth. This paper provides such a set of sufficient conditions, and presents a computational algorithm that will prove asymptotically consistent when computing Markovian equilibrium.
Classification-JEL: C62; D58; D62
Keywords: Equilibrium; Dynamic Models; Unbounded; Nonoptimal
File-Url: https://papers.tinbergen.nl/02085.pdf
File-Format: application/pdf
File-Size: 289086 bytes
Handle: RePEc:tin:wpaper:20020085