9321022 Shannon The importance of market imperfections such as externalities in both theoretical and policy-oriented research can hardly be overstated. Many of the most important questions in macroeconomics, such as determining the factors that affect long- term growth or explaining observed differences in growth and development rates across countries, either could not be meaningfully posed or could not be satisfactorily answered until market imperfections such as externalities in production and capital accumulation or distortionary government taxing and spending were incorporated into growth theory. However, most of this work addresses these issues in highly specialized models such as representative agent models, or models with parametricly specified time separable preferences and technologies. If these models are perturbed to allow for more interaction across periods in preferences of technologies, is an entirely new analysis necessary? Are conclusions of this new analysis radically different? The purpose of this project is to obtain robust answers to these same questions which depend as little as possible on assumptions about preferences or production technologies. This is done by studying the existence, comparative statistics, and determinacy of equilibria in general equilibrium models with externalities and an infinite number of commodities. The project also develops new methods for comparative statics analysis in problems with potential market distortions or imperfections.
