Preprint A27/2001
Collateral Avoids Ponzi Schemes in Incomplete Markets
Juan Pablo Torres-Martinez | Araujo, Aloisio | Páscoa, Mário
Keywords: Exogenous Collateral | Incomplete Markets | Equilibrium | Infinite Horizon | Ponzi Schemes
Without introducing either debt constraints or transversality conditions to avoid the possibility of Ponzi schemes, we show existence of equilibrium in an incomplete markets economy with a collateral structure.