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Tackling the instability of growth: A Kaleckian model with autonomous demand expenditures

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Abstract

We consider a stochastic financial exchange economy with a finite date-event tree representing time and uncertainty and a financial structure with possibly long-term assets. We exhibit a sufficient condition under which the set of marketable payoffs depends continuously on the arbitrage free asset prices. This generalizes previous results of Angeloni-Cornet and Magill-Quinzii involving only short-term assets. We also show that, under the same condition, the useless portfolios do not depend on the arbitrage free asset prices. We then derive an existence result for nominal assets for all state prices with assumptions only on the fundamental datas of the economy

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  • Jean-Marc Bonnisseau & Achis Chery, 2013. "Tackling the instability of growth: A Kaleckian model with autonomous demand expenditures," Documents de travail du Centre d'Economie de la Sorbonne 13029, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:13029
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    References listed on IDEAS

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    1. Aouani, Zaier & Cornet, Bernard, 2009. "Existence of financial equilibria with restricted participation," Journal of Mathematical Economics, Elsevier, vol. 45(12), pages 772-786, December.
    2. Bernard Cornet & Ramu Gopalan, 2010. "Arbitrage and equilibrium with portfolio constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 45(1), pages 227-252, October.
    3. Bernard Cornet & Abhishek Ranjan, 2012. "A remark on arbitrage free prices in multi-period economy," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00707401, HAL.
    4. repec:hal:pseose:halshs-00707401 is not listed on IDEAS
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    More about this item

    Keywords

    Incomplete markets; financial equilibium; multi-period model; long-term assets;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G1 - Financial Economics - - General Financial Markets

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