This paper deals with the existence of stationary sunspot equilibria (SSE) of finite order in an n-commodity economy. We first provide a simple condition that is sufficient for the existence of SSE associated with any given Markov matrix. This condition encompasses and extends previous results by Guesnerie (Journal of Economic Theory, 1986, 40, 103-128) and Chiappori and Guesnerie (in: Economic complexity, chaos, sunspots, bubbles and nonlinearity, 189, CUP). Also, we consider the order of the corresponding SSE (i.e. the cardinality of their support), and we show that almost all of these are of maximum order. Finally, we study the links between SSE and cycles, and find that the existence of cycles of order 2 detected by our condition implies that of SSE arbitrarily close to cycles of order k for any even k - although cycles of order k may not exist in such models.
- Index theorem
- Sunspot equilibrium