Markov distributional equilibrium dynamics in games with complementarities and no aggregate risk

We present a new approach to studying equilibrium dynamics in a class of stochastic games with a continuum of players with private types and strategic complementarities. We introduce a suitable equilibrium concept, called Markov Stationary Nash Distributional Equilibrium (MSNDE), prove its existence, and determine comparative statics of equilibrium paths and the steady-state invariant distributions to which they converge. Finally, we provide numerous applications of our results including: dynamic models of growth with status concerns, social distance, and paternalistic bequests with endogenous preferences for consumption.