Market demand functions in the capital asset pricing model
Article Abstract:
The Walras' Law and the Tobin Separation Property illustrate market demand in a Capital Asset Pricing Model economy Homogeneity. With the presence of choice associated with normalized price systems and demands fulfilling Walras' Law and the Tobin Separation Property, the presence of two variance-averse agents whose market demand corresponds with the preassigned values was noted. Such finding agrees with the Sonnenschein-Mantel-Debreu theorems related to market excess demand functions under general equilibrium models.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1998
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The survival assumption and existence of competitive equilibria when asset markets are incomplete
Article Abstract:
Economic literature have shown that, in incomplete markets, competitive equilibrium exists provided that endowment lies within an agent's consumption sets. The incomplete nature of markets are necessary to prove the need for additional assumptions. Using a model of a pure exchange economy that satisfies basic assumptions, it has been show that additional assumptions are necessary. These include the distribution of the endowments and preferences and joint restrictions on the asset structure.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1996
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Excess demand functions and incomplete markets
Article Abstract:
Excess demand in exchange economies with noncritical spot price systems and real assets induce equilibrium allocation in incomplete markets. Based on goods and expenditure function of assets instead of excess portfolio demand, it is concluded that the local behavior of excess demand depends solely on budget set and feasibility. Although excess demand functions have other characteristics based on price continuity and homogeneity, these characteristics are often caused by abstract models.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1996
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