GoTriple - Intertemporal equilibrium with financial asset and physical capital

authors

Contributors

IPAG ; Business School,

Van Xuan Center of Research in Economics, Management and Environment (VCREME),

Paris School of Economics (PSE) ; École des Ponts ParisTech (ENPC)-École normale supérieure - Paris (ENS Paris) ; Université Paris sciences et lettres (PSL)-Université Paris sciences et lettres (PSL)-Université Paris 1 Panthéon-Sorbonne (UP1)-Centre National de la Recherche Scientifique (CNRS)-École des hautes études en sciences sociales (EHESS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE),

Centre d'économie de la Sorbonne (CES) ; Université Paris 1 Panthéon-Sorbonne (UP1)-Centre National de la Recherche Scientifique (CNRS),

Centre d'Etudes des Politiques Economiques (EPEE) ; Université d'Évry-Val-d'Essonne (UEVE)

+ 4

Publisher

HAL CCSD

Abstract

We build an infinite-horizon dynamic deterministic general equilibrium model with imperfect markets (because of borrowing constraints), in which heterogeneous agents invest in capital or/and financial asset, and consume. There is a representative firm who maximizes its profit. Firstly, the existence of intertemporal equilibrium is proved even if aggregate capital is not uniformly bounded. Secondly, we study the interaction between the financial market and the productive sector. We also explore the nature of physical capital bubble and financial asset bubble as well.