Uniqueness of Steady States in Models with Overlapping Generations
AbstractIn this paper we examine the likelihood of multiple real steady states in deterministic exchange economies with overlapping generations. There is a single good and a single agent per generation with constant relative risk aversion expected utility. In order to test for multiple equilibria we employ methods from computational algebraic geometry. In our examples, we find that multiplicity becomes less likely as the life span of agents increases but becomes more likely as the coefficient of risk aversion increases. For moderate values of risk aversion, multiplicity is very unlikely when agents live for five or more periods. (JEL: C61, C63, D50, D58) (c) 2010 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 8 (2010)
Issue (Month): 2-3 (04-05)
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Web page: http://www.mitpressjournals.org/jeea
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
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