Existence of competitive equilibrium in an optimal growth model with heterogeneous agents and endogenous leisure

Aditya Goenka (1) , Cuong Le Van (2, 3, 4, 5, 6) , Manh-Hung Nguyen (6, 7, 8)

1 NUS - National University of Singapore
2 CES - Centre d'économie de la Sorbonne
3 University of Exeter Business School
4 Hanoi WRU
5 PSE - Paris School of Economics
6 VCREME - Van Xuan Center of Research in Economics, Management and Environment
7 LERNA - Economie des Ressources Naturelles
8 TSE-R - Toulouse School of Economics

This paper proves the existence of competitive equilibrium in a single-sector dynamic economy with heterogeneous agents, elastic labor supply and complete assets markets. The method of proof relies on some recent results concerning the existence of Lagrange multipliers in in nite dimensional spaces and their representation as a summable sequence and a direct application of the inward boundary fixed point theorem.

Mots clés: Elastic labor supply; Optimal growth model; Lagrange multipliers; Competitive equilib- rium; Individually Rational Pareto Optimum; Elastic labor supply.

Domaines: Economies et finances

Aditya Goenka, Cuong Le Van, Manh-Hung Nguyen. Existence of competitive equilibrium in an optimal growth model with heterogeneous agents and endogenous leisure. Macroeconomic Dynamics, 2011, 16 (supl1), pp.33-51. ⟨10.1017/S1365100511000587⟩. ⟨halshs-00639739⟩