Equilibrium Analysis of Dynamic Economies Preliminary Version

We study equilibrium properties of discrete-time, infinite-horizon smooth economies whose equilibria can be represented as a sequence of interrelated equations, and provide sufficient conditions to guarantee existence, (generic) determinacy and (generic) robustness of equilibria. Our approach exploits the sequential nature of a dynamic economy. An equilibrium is represented by a sequence of endogenous variables which solve a sequence of smooth systems of equations. For every point in time, standard smooth analysis techniques are used. The task then is to link periods, in order to obtain properties of equilibria. This link is represented by a correspondence, whose parallel in the macro/capital theoretic literature is the law of motion for state variables. Regularity conditions for the systems of equations and continuity properties of the law of motion drive most of the results in the paper.