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We consider infinite horizon economies with incomplete financial markets. Securities are in positive net supply and may be infinite-lived. We establish existence of equilibria by requiring borrowing constrains instead of portfolio restrictions..
Persistent link: https://www.econbiz.de/10011807360
We state an infinite horizon sequential markets model with real assets in positive net supply and subject to credit risk. By introducing default-dependent borrowing constraints, we show the existence of equilibrium.
Persistent link: https://www.econbiz.de/10011807364