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On the Existence of Equilibrium in Bewley Economies with Production

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  • Acikgoz, Omer

Abstract

I provide a proof of existence of stationary recursive competitive equilibrium in Bewley economies with production under very permissive assumptions. In particular, (i) utility function is allowed to be unbounded, and (ii) the underlying discrete idiosyncratic productivity process is allowed to take any form, aside from mild restrictions. Some of the intermediate results provide theoretical basis for assumptions often made in the quantitative macroeconomics literature.

Suggested Citation

  • Acikgoz, Omer, 2015. "On the Existence of Equilibrium in Bewley Economies with Production," MPRA Paper 69061, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:69061
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    References listed on IDEAS

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    More about this item

    Keywords

    Recursive Competitive Equilibrium; Bewley/Huggett/Aiyagari model;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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