UNIQUE MARKOV EQUILIBRIUM UNDER LIMITED COMMITMENT

• 成果类型: Article
• 署名作者: Bloise, Gaetano
• 署名单位: Yeshiva University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12438
• 发表日期: 2020
• 页码: 721-751
• 关键词: competitive-equilibrium; debt; RISK; EXISTENCE; economies; default; MODEL

摘要

I develop a recursive method for the characterization of competitive equilibrium under limited commitment with not-too-tight solvency constraints. The reputational mechanism is fragile, as it sustains constrained efficiency as well as a large set of constrained inefficient equilibria. However, I establish that the only strongly ergodic Markov equilibrium with trade is constrained efficient. The method relies on a planning program along with the theory of monotone concave operators. It is suitable for other applications to macroeconomics and dynamic contracts.