Bankruptcy in general equilibrium
Issue Date
2000Author
Sabarwal, Tarun
Publisher
Board of Governors of the Federal Reserve System
Type
Working Paper
Published Version
http://www.federalreserve.gov/pubs/feds/2000/200048/200048pap.pdfMetadata
Show full item recordAbstract
In this paper, I construct a model of an exchange economy in which bankruptcy arises in a manner similar to what we observe. This model is a more realistic representation of some markets in which intertemporal assets are traded. Using standard and natural assumptions, I show that every economy represented by this model has an equilibrium. Using examples, I highlight some welfare effects of bankruptcy.
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Citation
Sabarwal, Tarun, (2000), Bankruptcy in general equilibrium, No 2000-48, Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.).
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