On the robustness of factor structures to asset repackaging

The paper provides a framework to study asset repackaging in a large asset economy, modeled as an atomless measure space of assets. The main theorem shows that, given an initial economy with strict factor space F, any economy obtained by repackaging these assets has a unique factor space F′⊂F. Thus, in contrast to earlier literature, factor structures are robust to the repackaging of asset.