A General Equilibrium Model in Which Consumption Takes Time

Book section: This chapter examines a general equilibrium competitive economy with many heterogeneous agents. The key feature of the model is that consumption itself takes time so that a typical household is subject to a financial constraint as well as a time constraint. Using the dividend approach proposed by Le-Van and Nguyen (J Math Econ 43:135−152, 2007), it is shown that the economy possesses at least one autarkic Walrasian equilibrium. Sufficient conditions for the uniqueness of the autarkic equilibrium are then derived. Finally, a specific example is provided to illustrate the working of the model, including the derivation of the equilibrium labour allocation and some comparative static results.

Author(s)

Cuong Le-Van, Thi-Do-Hanh Nguyen, Ngoc-Sang Pham, Binh Tran-Nam

Publisher(s)
  • Springer, Singapore
Scientific editor(s)
  • Tran-Nam Binh
  • Tawada Makoto
  • Okawa Masayuki
Title of the work
  • Recent Developments in Normative Trade Theory and Welfare Economics. New Frontiers in Regional Science: Asian Perspectives
Date of publication
  • 2018
Keywords
  • General equilibrium
  • Heterogeneous households
  • Quasi-equilibrium
  • Dividend approach
Pages
  • 97-124
Version
  • 1
Volume
  • 26