Abstract
We analyse a single sector economy with H > 1 infinitely-lived agents that operate in a continuous-time framework. Utility functions are recursive but not additive. Both efficient and perfect foresight competitive equilibrium allocations are considered. The existence and stability of such allocations are investigated locally, i.e., in a neighbourhood of steady-state allocations. The model is shown to be useful for explaining the distribution of wealth and consumption across agents, and for analysing the way in which wealth redistribution can affect the dynamics of aggregate economic variables.
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