Dividend paying assets, the unit root property, and suboptimality

C-Tier
Journal: Journal of Mathematical Economics
Year: 2009
Volume: 45
Issue: 3-4
Pages: 223-232

Authors (2)

Chattopadhyay, Subir (University of York) Jimnez-Martnez, Antonio (not in RePEc)

Score contribution per author:

0.505 = (α=2.02 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We consider the stationary equilibria of one good overlapping generations (OLG) economies with a sequence of possibly incomplete asset markets and prove two results. First, we show that if some asset always pays a nonnegative dividend, then its price changes sign across states if and only if the Perron root of every agent's matrix of intertemporal rates of substitution exceeds one. Second, we provide sufficient conditions in terms of dividends and asset prices such that, keeping asset prices fixed, a conditionally Pareto improving allocation is induced by a stationary reassignment of a single asset. When taken together the results show that when for some agent the Perron root exceeds one, the existence of an asset that pays a strictly positive dividend in every state is sufficient to induce an improvement.

Technical Details

RePEc Handle
repec:eee:mateco:v:45:y:2009:i:3-4:p:223-232
Journal Field
Theory
Author Count
2
Added to Database
2026-01-25