Sequential regularity in smooth production economies |
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Authors: | Michael Mandler |
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Institution: | aDeparment of Economics, Harvard University, Cambridge, MA 02138. USA |
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Abstract: | In general equilibrium models where agents trade sequentially in multiple periods, the equilibria that endogenously occur in later periods can be robustly indeterminate if production sets are not everywhere differentiable (as. for example, with linear activities). The present paper proves that if technology is smooth, then equilibria are sequentially regular. That is. the equilibria of the endogenously generated economies occurring in later periods that confirm the unanimous expectations formed by agents in earlier periods are regular (and thus, for example, isolated from other equilibria). The paper also proves and utilizes the standard result that the overall intertemporal equilibria are regular. |
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Keywords: | JEL classification: D5I D90 |
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