Partially Revealing Rational Expectations Equilibria with Nominal Assets
Author | : Rohit Rahi |
Publisher | : |
Total Pages | : |
Release | : 2000 |
ISBN-10 | : OCLC:1291266512 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Partially Revealing Rational Expectations Equilibria with Nominal Assets written by Rohit Rahi and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides an existence theorem for rational expectations equilibria that aggregate information imperfectly. It studies a general equilibrium model of a static exchange economy with incomplete asset markets and finitely revealing equilibria exist, provided assets have nominal payoffs (in terms of units of account). In fact, any structure of information revealed by prices, that is consistent with the absence of arbitrage, can be embedded in a rational expectations equilibrium. This is in sharp contrast to the case of real assets, in which prices are generically fully revealing.