Stationary Equilibria of Economies with a Continuum of Heterogeneous Consumers
نویسندگان
چکیده
This paper studies stationary equilibria of a production economy with a continuum of heterogeneous consumers subject to borrowing constraints and individual Markov endowment shocks. The existence of a stationary equilibrium is established. The equilibrium interest rate is less than the rate of time preference of the most patient consumer provided a constraint that restricts the borrowing limit is satisfied. Properties of stationary equilibria including wealth distribution, precautionary savings and comparative statics are analyzed.
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