Abstract
We study a class of stochastic Overlapping generations (OLG) economies that have one-memory equilibria, that is equilibria that are determined by the current and past realizations of the states of uncertainty. This class is negligible, but important. In particular, it contains all the known examples of nonexistence of recursive equilibrium. We show that, within this restricted domain, the existence of recursive equilibrium is actually typical, and such examples are therefore nonrobust.
Original language | English (US) |
---|---|
Pages (from-to) | 417-437 |
Number of pages | 21 |
Journal | Economic Theory |
Volume | 37 |
Issue number | 3 |
DOIs | |
State | Published - Dec 2008 |
Keywords
- One-memory equilibrium
- Recursive equilibrium
- Stochastic OLG economies
ASJC Scopus subject areas
- Economics and Econometrics