Working Paper
On characterizing equilibria of economies with externalities and taxes as solutions to optimization problems
Kehoe, Timothy J.; Levine, David K.; Romer, Paul M. (1990)
We characterize equilibria of general equilibrium models with externalities and taxes as solutions to optimization problems. This characterization is similar to Negishi?s characterization of equilibria of economies without externalities or taxes as solutions to social planning problems. It is often useful for computing equilibria or deriving their properties. Frequently, however, finding the optimization problem that a particular equilibrium solves is difficult. This is especially true in economies with multiple equilibria. In a dynamic economy with externalities or taxes there may be a ...
Working Papers , Paper 436

Report
Determinacy of equilibria in dynamic models with finitely many consumers
Kehoe, Timothy J.; Levine, David K.; Romer, Paul M. (1989)
We consider a production economy with a finite number of heterogeneous, infinitely lived consumers. We show that, if the economy is smooth enough, equilibria are locally unique for almost all endowments. We do so by converting the infinite-dimensional fixed point problem stated in terms of prices and commodities into a finite-dimensional Negishi problem involving individual weights in a social value function. By adding artificial fixed factors to utility and production functions, we can write the equilibrium conditions equating spending and income for each consumer entirely in terms of ...
Staff Report , Paper 118