Open AccessRecursive allocations and wealth distribution with multiple goods: Existence, survivorship, and dynamics
Author(s) -
Colacito R.,
Croce M. M.,
Liu Zhao
Publication year - 2019
Publication title -
quantitative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.062
H-Index - 27
eISSN - 1759-7331
pISSN - 1759-7323
DOI - 10.3982/qe457
Subject(s) - dynamics (music) , survivorship curve , economics , distribution (mathematics) , wealth distribution , demography , mathematics , psychology , inequality , sociology , population , mathematical analysis , pedagogy
We characterize the equilibrium of a complete markets economy with multiple agents featuring a preference for the timing of the resolution of uncertainty. Utilities are defined over an aggregate of two goods. We provide conditions under which the solution of the planner's problem exists, and it features a nondegenerate invariant distribution of Pareto weights. We also show that perturbation methods replicate the salient features of our recursive risk‐sharing scheme, provided that higher‐order terms are included.