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Necessary and sufficient conditions for determinacy of asymptotically stationary equilibria in OLG models

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  • Gorokhovsky, Alexander
  • Rubinchik, Anna

Abstract

We propose a criterion for verifying whether an equilibrium of an overlapping-generations model is amenable to local policy analysis, i.e., is determinate. The criterion is applicable for a generic set of parameters of the model, and in case of indeterminacy, it indicates the nature of the problem: multiplicity of equilibria or their absence for near-by parameters.

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  • Gorokhovsky, Alexander & Rubinchik, Anna, 2022. "Necessary and sufficient conditions for determinacy of asymptotically stationary equilibria in OLG models," Journal of Economic Theory, Elsevier, vol. 204(C).
    • Handle: RePEc:eee:jetheo:v:204:y:2022:i:c:s0022053122000862
    DOI: 10.1016/j.jet.2022.105496
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    More about this item

    Keywords

    Overlapping generations; Implicit function theorem; Determinacy; Time-invariance; Comparative statics;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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