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Dynamics in an olg model with non-separable preferences

Author

Listed:
  • Giorgia Marini

    (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici)

Abstract

This paper presents sufficient conditions for existence and uniqueness of a steady state equilibrium in an OLG model with non-separable preferences and analyzes the implications of such assumption for the local stability of the steady state equilibrium. The conditions for a stable solution are derived under the assumption that habits are transmitted both across and within generations. Under this assumption, monotonic convergence to the steady state is not always assured. Both competitive and optimal equilibrium may display explosive dynamics.

Suggested Citation

  • Giorgia Marini, 2015. "Dynamics in an olg model with non-separable preferences," Public Finance Research Papers 15, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    • Handle: RePEc:gfe:pfrp00:00015
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    File URL: https://www.dsge.uniroma1.it/sites/default/files/pubblicazioni/economia/research-papers/e-pfrp-n-15.pdf
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    More about this item

    Keywords

    Non-separable preferences; OLG; cycles;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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