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Existence of a competitive equilibrium in one sector growth model with heterogeneous agents and irreversible investment

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  • Cuong LE VAN

    (CNRS, CERSEM, Université Paris 1, France)

  • Yiannis VALAKIS

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

We prove existence of a competitive equilibrium in a version of a Ramsey (one sector) model in which agents are heterogeneous and gross investment is constrained to be non negative. We do so by converting the infinite-dimensional fixed point problem stated in terms of prices and commodities into a finite-dimensional Negishi problem involving individual weights in a social value function. This method allows us to obtain detailed results concerning the properties of competitive equilibria. Because of the simplicity of the techniques utilized our approach is amenable to be adapted by practitioners in analogous problems often studied in macroeconomics

Suggested Citation

  • Cuong LE VAN & Yiannis VALAKIS, 2001. "Existence of a competitive equilibrium in one sector growth model with heterogeneous agents and irreversible investment," LIDAM Discussion Papers IRES 2001018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2001018
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    More about this item

    Keywords

    One sector growth model; Pareto-optimum; Competitive equilibrium; Heterogeneous agents; Non negative gross investment;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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