JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . Wiley, The stability of collusive arrangements is closely related to the question of incentives for price taking, competitive behavior. Dreze and Gabszewicz [1971] have derived a negative result for the stability of collusive arrangements ("syndicates") in large, atomless economies. Johansen [1977], commenting on Postlewaite and Roberts [1977], has raised the possibility of collusive behavior as an objection to competitive assumptions. Our argument demonstrates that his point is well taken except for the limiting case of an infinite economy. The reply of Postlewaite and Roberts [1976] refers, of course, precisely to this case.
When government liabilities (including money) are held in private portfolios only as stores of value and do not provide additional services (such as liquidity), real variables are not affected by changes in the money supply due to the government's trading in real assets (open market operations). This neutrality of monetary policy fails if the government either trades in nominal assets, or it distributes subsidies and levies taxes.
At a stationary Markov equilibrium of a Markovian economy of overlapping generations, prices at a date-event are determined by the realization of the shock, the distribution of wealth and, with production, the stock of capital.Stationary Markov equilibria may not exist; this is the case with intragenerational heterogeneity and multiple commodities or long life spans.Generalized Markov equilibria exist if prices are allowed to vary also with the realization of the shock, prices and the allocation of consumption and production at the predecessor date-event.(Stationary) Markov -equilibria always exist; as → 0, allocations and prices converge to equilibrium prices and allocations that, however, need not be stationary.
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