Abstract

http://ssrn.com/abstract=1647883
 
 

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Recursive Allocations and Wealth Distribution with Multiple Goods: Existence, Survivorship, and Dynamics


Riccardo Colacito


University of North Carolina Kenan-Flagler Business School

Mariano Massimiliano Croce


University of North Carolina Kenan-Flagler Business School

August 1, 2011


Abstract:     
We characterize the equilibrium of a complete markets economy with multiple agents displaying a preference for the timing of the resolution of uncertainty. Utilities are defined over an aggregate of two goods. We provide conditions under which the solution of the planner's problem exists and it features a non-degenerate invariant distribution of Pareto weights. We show that a first order Taylor expansion about the unconditional mean of the economy is not only highly inaccurate, but it also implies that one of the two agents receives no wealth in the long-run positive probability.

Number of Pages in PDF File: 37

JEL Classification: C62, F37

working papers series


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Date posted: July 23, 2010 ; Last revised: October 3, 2012

Suggested Citation

Colacito, Riccardo and Croce, Mariano Massimiliano, Recursive Allocations and Wealth Distribution with Multiple Goods: Existence, Survivorship, and Dynamics (August 1, 2011). Available at SSRN: http://ssrn.com/abstract=1647883 or http://dx.doi.org/10.2139/ssrn.1647883

Contact Information

Riccardo Colacito
University of North Carolina Kenan-Flagler Business School ( email )
Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States
HOME PAGE: http://www.unc.edu/~colacitr

Mariano Massimiliano Croce (Contact Author)
University of North Carolina Kenan-Flagler Business School ( email )
Chapel Hill, NC 27599-3490
HOME PAGE: http://homepages.nyu.edu/~mmc287

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