Uniqueness of competitive equilibrium with solvency constraints under gross-substitution

Gaetano Bloise, Alessandro Citanna

Research output: Contribution to journalArticlepeer-review


Under a gross substitution assumption, we prove existence and uniqueness of competitive equilibrium for an infinite-horizon exchange economy with limited commitment and complete financial markets. Risk-sharing is limited as only a part of the private endowment can be used as collateral to secure debt. The unique equilibrium is Markovian with respect to a minimal state space consisting of exogenous shocks and Negishi's welfare weights. We represent equilibrium dynamics via a monotone operator acting on entire wealth distribution functions. We construct a fixed point of this operator generating a lower and an upper orbit and proving coincidence of accumulation points.

Original languageEnglish (US)
Pages (from-to)287-295
Number of pages9
JournalJournal of Mathematical Economics
StatePublished - Dec 1 2015


  • Competitive equilibrium
  • Gross substitution
  • Monotone operator
  • Solvency constraints

ASJC Scopus subject areas

  • Economics and Econometrics
  • Applied Mathematics


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