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Production in General Equilibrium with Incomplete Financial Markets
Department of Mathematics, University of Sussex, Brighton, UK
- 1 Department of Mathematics, University of Sussex, Brighton, UK
Journal of Mathematical Finance·Volume 06 (2016)·Pages 293–302·Published 9 March 2016·DOI10.4236/jmf.2016.62025
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Abstract
This paper considers a general equilibrium model with incomplete financial markets where production sets depend on the financial decisions of the firms. In the short run, firms make financial choices in order to build up production capacity. Given production capacity firms make profit maximizing production decisions in period two. We provide the conditions of existence of equilibria.
KeywordsGeneral EquilibriumIncomplete Financial MarketsProductionExistence of EquilibriaTransversality
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