TY  - JOUR
AU  - Farmer,Roger
AU  - Nourry,Carine
AU  - Venditti,Alain
TI  - Debt, Deficits and Finite Horizons: The Stochastic Case
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15025
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15025
L1  - http://www.nber.org/papers/w15025.pdf
N1  - Author contact info:
Roger Farmer
UCLA
Department of Economics
Box 951477
Los Angeles, CA 90095-1477
Tel: 310/825-6547
Fax: 310/825-9528
E-Mail: rfarmer@econ.ucla.edu

Carine Nourry
GREQAM
2 rue de la Charite
13236 Marseille cedex 02
France
E-Mail: carine.nourry@univmed.fr

Alain Venditti
GREQAM
2 rue de la Charite
13236 Marseille cedex 02
France
E-Mail: alain.venditti@univmed.fr
AB  - We introduce a solution technique for the study of discrete time stochastic models populated by long-lived agents. We introduce aggregate uncertainty and complete markets into a 'perpetual-youth' model of a kind first studied by Olivier Blanchard and we show that the pure-trade version of the model behaves much like the two-period overlapping generations model. Our methods are easily generalized to economies with production and they should prove useful to researchers who seek a tractable stochastic model in which fiscal policy has real effects on aggregate allocations.
ER  -