Sequential equilibrium in incomplete markets with long-term debt
Sequential-Equilibrium.pdf (1.024Mb)Abstract
This paper proves equilibrium existence in an incomplete market sequential economy
with finitely-lived debt contracts. Introducing credit constraints limiting agents’ access to liquidity, we show that a competitive equilibrium always exists. Our results are consistent with broad
forms of endogenous credit segmentation
Patrocinador
The author thanks Juan Pablo Torres-Mart´ınez and Emma Moreno-Garc´ıa for valuable mentorship and support, as well as the participants at the DGS VI /JOLATE XIX Congress for useful comments. This project originates from the thesis of the author’s MSc. in Economics at the Departamento de Econom´ıa, Universidad de Chile,
which was funded by the Comisi´on Nacional de Investigaci´on Cient´ıfica y Tecnol´ogica through the grant CONICYTPFCHA/Mag´ısterNacional/2017-22170387. The author also thanks the Departamento de Posgrado y Post´ıtulo,
Vicerrector´ıa de Asuntos Acad´emicos from the University of Chile for providing funding for research activities at
the Universidad de Salamanca
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URI: https://repositorio.uchile.cl/handle/2250/153421
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Series Documentos de Trabajo No. 474, pp. 1 - 20, Noviembre, 2018
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Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 3.0 Chile