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Global convergence in an overlapping generations model with two-sided altruism

Author

Listed:
  • Takaaki Aoki

    (Kyoto University)

  • Kazuo Nishimura

    (Kobe University
    Trade and Industry
    Santa Fe Institute)

Abstract

We study the evolutionary dynamics of an overlapping generations economy with two-sided altruism, where each generation cares about the utilities of its parental generation, its offspring, and its own. We assume that the young and old generations in each period act jointly, as a central planner. We then introduce the concepts of a two-sided altruistic path and a two-sided altruistic stationary path. Then, we go on to prove that the former always converges to the latter, in the two-sided altruistic model. This stationary capital level is higher than the steady-state level in the model with a constant discount factor.

Suggested Citation

  • Takaaki Aoki & Kazuo Nishimura, 2017. "Global convergence in an overlapping generations model with two-sided altruism," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 1205-1220, November.
    • Handle: RePEc:spr:joevec:v:27:y:2017:i:5:d:10.1007_s00191-017-0519-3
    DOI: 10.1007/s00191-017-0519-3
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Two-sided altruism; Global convergence; Euler equation; Principle of optimality;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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