Comparing recursive equilibrium in economies with dynamic complementarities and indeterminacy

Intertemporal equilibrium with physical capital and financial asset: Role of dividend taxation

“…So, it is not easy to obtain some nice properties like monotonicity and convergence of capital stock (K t ) as in the standard optimal growth theory (see Le Van and Dana (2003); Acemoglu (2009) among others). Acemoglu and Jensen (2015), Datta et al (2018) study comparative statics of recursive equilibria. However, intertemporal equilibria in our paper may not be recursive and therefore their methods cannot be directly applied here.…”

“…It should be noticed that our results hold for any equilibrium, including recursive ones. Although some authors (Acemoglu and Jensen, 2015;Datta et al, 2018) study comparative statics of recursive equilibria, intertemporal equilibria in our paper maybe not recursive, and therefore their methods cannot be directly applied in our framework.…”

Special issue: supermodularity and monotone methods in economics

“…This special issue contains two papers dedicated to various applications of lattice programming and monotone methods to macroeconomic dynamic general equilibrium theory. Datta et al (2018) investigates recursive equilibrium in economies with complementarities propose a new method to characterize minimal state-space recursive equilibrium for a broad class of infinite horizon dynamic general equilibrium models. This class includes models for which there are no known previous existence results, as well as model for which equilibrium has been claimed to be indeterminate (see, e.g., Santos 2002).…”

“…At this point, it might be instructive to point out that the term "monotone methods" may be taken in its broadest sense as encompassing the theory of supermodular optimization and games, among other aspects. However, the most frequent use of this phrase actually occurs in the study of economic dynamics and refers more specifically to the use of lattice programming techniques, along with versions of the Tarski-Kantorovich-Katsner fixed-point theorem (Tarski 1955), and of the study of a self-map on consumption functions constructed directly from Euler equations in economic dynamics (as in Lucas and Stokey 1987;Coleman 1991;Datta et al 2018; Barbie and Hillebrand 2018, among others). To deal with the uniqueness issue, the study of this mapping also sometimes involves another lesser-known fixed-point argument for concave maps due to Krasnosel'skii and Zabreiko (1984).…”

“…The remaining six papers consider various economic applications, which may be classified into two broad groups. The first of these deals with dynamic general equilibrium and overlapping generations models within macroeconomic dynamics (Datta et al 2018; Barbie and Hillebrand 2018). The second group of papers consists of studies in industrial organization (Cosandier et al 2018; Reynolds and Rietzke 2018) and applied microeconomic theory (Dekel and Pauzner 2018).…”