Existence and optimality of currency equilibrium in stochastic overlapping generations models: The pure endowment case (Q1813904)

This paper examines questions on the sufficiency of conditions for the existence of a monetary equilibrium in a neoclassical setting. Thus resource allocation among generations is based on assumptions of the type: (a) there is only one individual per generation, (b) the same preference patterns hold for all generations, (c) at each date there is only one good and (d) it is not possible for the young and old to negotiate risk sharing contracts; uncertainty is the result of exogenously determined shocks and it is of a stationary nature. Then the author discusses existence and optimality and outlines extensions of the basic model. Examples and proofs are given. To assess the full impact of the paper, a glance at \textit{B. Ingrao} and \textit{G. Israel's} book [``The invisible hand'' (1990; Zbl 0717.90003)] will be helpful.