|
|
|
|
||||
|
||||
A Central-Planning Approach to Dynamic Incomplete-Market EquilibriumBernard DumasINSEAD; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) Pascal J. MaenhoutINSEAD - Finance December 13, 2002 AFA 2003 Washington, DC Meetings Abstract: We show that a central planner with two selves, or two "pseudo welfare functions", are sufficient to deliver a market equilibrium that prevails among any (finite) number of heterogeneous individual agents acting competitively in an incomplete financial market. Furthermore, we are able to exhibit a recursive formulation of the two-central planner problem. In that formulation, every aspect of the economy can be derived one step at a time, by a process of backward induction as in dynamic programming.
Number of Pages in PDF File: 36 working papers seriesDate posted: December 21, 2002Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo5 in 0.688 seconds
