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

Abstract

This paper proves the existence of competitive equilibrium in a single-sector dynamic economy with heterogeneous agents, elastic labor supply, and complete asset markets. The method of proof relies on some recent results concerning the existence of Lagrange multipliers in infinite-dimensional spaces and their representation as a summable sequence and a direct application of the inward-boundary fixed point theorem. © 2012 Cambridge University Press.