Two-period cycles in a three-period overlapping generations model
AbstractWe study the properties of two-period monetary cycles in simple pure exchange overlapping generations economies in which the households live for three periods. We demonstrate that these economies can support cycles under a much broader -- and, arguably, more plausible -- range of assumptions than the analogous two-period economies. We show that economies that fail the well-known Grandmont  condition can have cycles, and that economies that satisfy the condition can fail to have cycles. In addition, we show that economies can have monetary cycles when they do not have conventional monetary steady states, and when aggregate demand for assets is not decreasing in the real return rate at a gross real rate of unity.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 109 (2003)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/locate/inca/622869
Other versions of this item:
- Bhattacharya, Joydeep & Russell, Steven, 2002. "Two-Period Cycles in a Three-Period Overlapping Generations Model," Staff General Research Papers 10250, Iowa State University, Department of Economics.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
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