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|Title||Recursive Equilibria in Dynamic Economies with Stochastic Production|
|Item Subtype||Original Work|
|Status||Published electronically before print/final form (Epub ahead of print)|
|Abstract Text||In this paper we prove the existence of recursive equilibria in stochastic production economies with infinitely lived agents and incomplete financial markets. We consider a general dynamic model with several commodities, which encompasses heterogeneous agent versions of both the Lucas asset pricing model and the stochastic neo-classical growth model as special cases. Our main assumption is that there are atomless shocks to fundamentals that have a purely transitory component and a component that does not depend on last period's shocks directly.|
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