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<p>Using constructive order-theoretic techniques, we characterize the set of minimal state-space recursive competitive equilibria (RCE) in the canonical small open economy model of sudden stops with price-dependent collateral constraints. In addition, we develop a computable theory of the existence of RCE, as well as a complete constructive theory of equilibrium comparative statics of the entire set of RCE relative to ordered changes in important deep parameters of the economy. Using recent results on iterative monotone comparative statics, we also provide a new iterative approach to checking whether particular RCE are "order stable" relative to ordered changes in the deep parameters (and satisfying the correspondence principle). Finally, we give sufficient conditions for the uniqueness of RCE, and these sufficient conditions are extremely strong relative to applications of these models in the quantitative applied literature.</p>

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Dynamic complementarities and multiple equilibria in open economies with collateral constraints

  • 期刊论文

  • 发表日期：

    2026年7月5日

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  • Damian Pierri,
  • Kevin Reffett

摘要

Using constructive order-theoretic techniques, we characterize the set of minimal state-space recursive competitive equilibria (RCE) in the canonical small open economy model of sudden stops with price-dependent collateral constraints. In addition, we develop a computable theory of the existence of RCE, as well as a complete constructive theory of equilibrium comparative statics of the entire set of RCE relative to ordered changes in important deep parameters of the economy. Using recent results on iterative monotone comparative statics, we also provide a new iterative approach to checking whether particular RCE are "order stable" relative to ordered changes in the deep parameters (and satisfying the correspondence principle). Finally, we give sufficient conditions for the uniqueness of RCE, and these sufficient conditions are extremely strong relative to applications of these models in the quantitative applied literature.