Intermediation, Bubbles, and Pareto Efficiency in Economies with Production

摘要: In a recent study, Tirole (1985) extends Diamond's (1965, pp. 1130-1135) well-known overlapping generations model of private production economy by permitting consumption loans. That is, in addition to financing the capital investment firms, savings one generation can be used finance agents other whose demands are excess their endowments. then shows that re sulting production-consumption loan fails satisfy First Welfare Theorem. Specifically, as reviewed Section 2, below, two stationary competitive equilibria exist for this economy: Pareto inefficient equilibrium e with no loans; and efficient "golden-rule" equihbrium e" which loans made...