An Application of Convex Analysis to General Equilibrium Theory with Incomplete Financial Markets

  • Pascal Christian Stiefenhofer

Abstract

This paper considers an application of convex analysis to the study of corporate equilibria in a two period endogenized asset general equilibrium model with incomplete financial markets. It shows by means of a particular case study that for a fixed financial policy every extensive form stock market equilibrium can be translated into a reduced form equilibrium. This result suggests determinateness of corporate equilibria for varying financial parameters. A change in the
firm’s financial policy changes the production set available to it in the next period, hence real effects.

Published
2018-05-11
How to Cite
STIEFENHOFER, Pascal Christian. An Application of Convex Analysis to General Equilibrium Theory with Incomplete Financial Markets. GSTF Journal of Mathematics, Statistics and Operations Research (JMSOR), [S.l.], v. 2, n. 1, may 2018. ISSN 2251-3396. Available at: <http://dl6.globalstf.org/index.php/jmsor/article/view/1512>. Date accessed: 16 dec. 2018.