Timeline for Lagrangian: How to understand the No-Ponzi Condition
Current License: CC BY-SA 4.0
7 events
| when toggle format | what | by | license | comment | |
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| Feb 12, 2021 at 3:32 | comment | added | EndLoop | I have posted my question here - economics.stackexchange.com/questions/42524/… | |
| Feb 12, 2021 at 1:41 | comment | added | EndLoop | Perhaps I should put a question up for this to continue this discussion. $p_{t}c_{t} + p_{t} b_{t+1} + b_{gt+1} = y_{t} + b_{gt}(1+i_{t}) + p_{t} b_{t} $ where $b_{t}$ denotes an asset which is traded in two countries and $b_{gt}$ is an asset which is traded in only one country. Now the No-ponzi condition just prevents me from borrowing more than what I could pay in one lifetime. So as you said it is going to be a combination of these assets. So the initial value for these assets for the problem would also be a combination of these two assets? | |
| Feb 10, 2021 at 10:10 | comment | added | FooBar | @EndLoop intuitively, you can't go roll forward debt until the end of time. The way you would write it as $\psi(B_T^1 + B_T^2)$, where $1$ and $2$ index the two assets. You could have two conditions separately $\psi^1 B_T^1 + \psi^2 B_t^2$, which would lead to the same result, but it would not be "on the letter" what the NP condition is about. | |
| Feb 6, 2021 at 4:14 | comment | added | EndLoop | What happens if there are 2 assets with different returns? Will there be two no ponzi conditions? Would be glad to get some reference on this. | |
| S Mar 13, 2020 at 21:55 | history | suggested | Alalalalaki | CC BY-SA 4.0 |
I think this is a typo in the FOCs.
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| Mar 3, 2020 at 13:45 | review | Suggested edits | |||
| S Mar 13, 2020 at 21:55 | |||||
| Jun 8, 2015 at 12:53 | history | answered | FooBar | CC BY-SA 3.0 |