Abstract
This chapter presents an intertemporal general equilibrium model with finite horizon and enough stationarity to examine business fluctuations and the incompleteness of financial markets. Incompleteness is modeled by way of restrictions in the participation of some of the agents in the financial markets. A restricted agent is practically unable to transfer wealth through time, which means that the agent can be modeled as maximizing his preferences subject to several budget constraints, one for each time period. While there are no business fluctuations if markets are complete, the set of economies displaying fluctuations of the equilibrium allocations has, for a generic set of preferences, a nonempty interior as soon as at least one agent is restricted. There exists a relationship between the size of the set of economies displaying business fluctuations and the extent of market incompleteness.
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