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Sunspot equilibria and the transfer paradox

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  • Thorsten Hens
  • Beate Pilgrim

Abstract

We show that for international economies with two countries, in which agents have additively separable utility functions, the existence of sunspot equilibria is equivalent to the occurrence of the transfer paradox. This equivalence enables us to provide some new insights on the relation of the existence of sunspot equilibria and the multiplicity of spot market equilibria. Copyright Springer-Verlag Berlin/Heidelberg 2004

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  • Thorsten Hens & Beate Pilgrim, 2004. "Sunspot equilibria and the transfer paradox," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(3), pages 583-602, October.
    • Handle: RePEc:spr:joecth:v:24:y:2004:i:3:p:583-602
    DOI: 10.1007/s00199-004-0521-5
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    Cited by:

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    2. Takeshi Momi, 2008. "Note on the non-existence of sunspot equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 503-513, September.

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    Keywords

    Sunspot equilibria; Transfer paradox.;

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