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Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp01sn00b1250
 Title: Existence Results in General Equilibrium Theory Authors: Sagredo, Juan Advisors: Cheridito, Patrick Contributors: Operations Research and Financial Engineering Department Subjects: Economics Issue Date: 2016 Publisher: Princeton, NJ : Princeton University Abstract: This dissertation seeks to answer three existing questions in general equilbrium theory and introduce a framework permitting for the extension of equilibrium analysis to a new class of models. Models with uncertainty at the aggregate and idiosyncratic level have become standard within macroeconomics due to their greater explanatory power. In 1998, Per Krusell and Anthony Smith laid the foundation that permitted much of this work to take place by introducing a theoretical framework featuring such shocks but which was also amenable to study via practical numerical methods. Existence of equilibrium in their model was not formally analyzed until Jianjun Miao studied the problem in 2006; unfortunately, arguments presented therein have important complications. First, we provide a correct, and novel, proof for the existence of sequential equilibrium in the Krusell-Smith model. An extension of the model to include economies with endogenous labor choices and non-zero borrowing will then be developed. Within the literature, an important working assumption is the existence of stochastic processes featuring conditional-no-aggregate-uncertainty (CNAU). This requirement that the empirical distribution of the idiosyncratic and aggregate shock processes depend only on realizations of the aggregate shock process can be easily met when there are countably many agents by the law of large numbers, but for a continuum of agents arguments of the type will not work. As such, we will provide two methods for constructing processes featuring CNAU in a general setting. Practicality and behavioral demands also make it important for sequential equilibria to be reproducible via the recursively optimal behavior of agents who have a sufficiently simple set of state variables. In this vein, we will propose an intuitive and sufficient state variable that allows for the replication at least some sequential equilibria, while making savings in the informational demands placed on actors; thereby, giving an affirmative answer to a weakened formulation of the existence of recursive equilibria question. Finally, we present an equilibrium framework for economies featuring rational inattention. In particular, we will study the behavior of agents who face information constraints regarding the observation of shocks and prices in a production economy and present an existence result. URI: http://arks.princeton.edu/ark:/88435/dsp01sn00b1250 Alternate format: The Mudd Manuscript Library retains one bound copy of each dissertation. Search for these copies in the library's main catalog: catalog.princeton.edu Type of Material: Academic dissertations (Ph.D.) Language: en Appears in Collections: Operations Research and Financial Engineering

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