Equilibrium Stability and Uniqueness with a Large Number of Commodities and Patient Consumers (opens in new tab)

We show that a large effective number of commodities can be a source of equilibrium stability and uniqueness: expanding substitution opportunities strengthens aggregate substitution effects. We study finite dated-commodity exchange economies obtained by truncating a countably infinite-horizon environment with discounted, additively separable utilities. In this setting, the effective number of commodities is the discounted count of dated commodit...