Heterogeneous Agent General Equilibrium: A Latent Framework Analysis of the Aiyagari-Bewley-Krusell-Smith Models

We present a formal framework connecting heterogeneous agent general equilibrium models to the Latent representation theory. The central insight is that the wealth distribution in Aiyagari-Bewley-Krusell-Smith economies has a characteristic Latent Number ρ that determines: (i) how many moments are needed to approximate equilibrium dynamics, (ii) the error bounds for representative agent approximations, and (iii) the effectiveness of policy interventions. We prove 18 theorems characterizing precautionary savings, wealth distribution dynamics, the Krusell-Smith approximation, policy evaluation, and the connection to asset pricing via the equity premium puzzle. The representative agent emerges as the ρ → ∞ limit. All results are formally verified in the Platonic proof system.