2025/04/25 by Jin Hyuk Choi, Choi, Jin Hyuk, Kim Weston +1
Economics, Econometrics and Finance · #60G55 #91B51 #91G30 #Economic Growth and Productivity #Economic theories and models #FOS: Economics and business #Mathematical Finance (q-fin.MF) #Politics, Economics, and Education Policy
paper · pdf · doi:10.48550/arxiv.2504.18009
openalex publication_date 2025/04/25 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We prove the existence of a Radner equilibrium in a model with population growth and analyze the effects on asset prices. A finite population of agents grows indefinitely at a Poisson rate, while receiving unspanned income and choosing between consumption and investing into an annuity with infinitely-lived exponential preferences. After establishing the existence of an equilibrium for a truncated number of agents, we prove that an equilibrium exists for the model with unlimited population growth. Our numerics show that increasing the birth rate reduces oscillations in the equilibrium annuity price, and when younger agents prioritize the present more than older agents, the equilibrium annuity price rises compared to a uniform demographic.