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

39 Pages Posted: 23 Jul 2010 Last revised: 17 May 2014

Riccardo Colacito

University of North Carolina Kenan-Flagler Business School

Mariano Massimiliano Croce

University of North Carolina Kenan-Flagler Business School

Date Written: May 16, 2014

Abstract

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

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

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 )

McColl Builiding
Chapel Hill, NC North Carolina 27599-3490
United States

HOME PAGE: http://dl.dropboxusercontent.com/u/17690403/mmc_site/public_html/index.htm

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