Article
Collateral avoids Ponzi schemes in incomplete markets
Econometrica
(2002)
Abstract
Without introducing either debt constraints or transversality conditions to avoid the possibility of Ponzi schemes, we show the existence of equilibrium in an infinite horizon incomplete markets economy with a collateral structure.
Keywords
- Equilibrium,
- Ponzi schemes,
- collateralized asset markets
Disciplines
Publication Date
2002
Citation Information
Araujo, A., M. Páscoa, and J. P. Torres-Martínez (2002): "Collateral avoids Ponzi schemes in incomplete markets," Econometrica, volume 70, pages 1613-1638.