On the nonexistence of recursive equilibrium in stochastic OLG economies

Alessandro Citanna, Paolo Siconolfi

Research output: Contribution to journalArticlepeer-review

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 languageEnglish (US)
Pages (from-to)417-437
Number of pages21
JournalEconomic Theory
Volume37
Issue number3
DOIs
StatePublished - Dec 2008

Keywords

  • One-memory equilibrium
  • Recursive equilibrium
  • Stochastic OLG economies

ASJC Scopus subject areas

  • Economics and Econometrics

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