39 Pages Posted: 23 Jul 2010 Last revised: 17 May 2014
Date Written: May 16, 2014
We characterize the equilibrium of a complete markets economy with multiple agents featuring 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 also show that perturbation methods replicate the salient features of our recursive risk-sharing scheme, provided that higher order terms are included.
JEL Classification: C62, F37, G1
Suggested Citation: Suggested Citation
Colacito, Riccardo and Croce, Mariano Massimiliano, Recursive Allocations and Wealth Distribution with Multiple Goods: Existence, Survivorship, and Dynamics (May 16, 2014). Available at SSRN: https://ssrn.com/abstract=1647883 or http://dx.doi.org/10.2139/ssrn.1647883
By Andrew Abel