IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00693817.html
   My bibliography  Save this paper

Forward and Backward Dynamics in implicitly defined Overl apping Generations Models

Author

Listed:
  • Laura Gardini
  • Cars Hommes
  • Fabio Tramontana
  • Robin de Vilder

Abstract

In dynamic economic models derived from optimization principles, the forward equilibrium dynamics may not be uniquely defined, while the backward dy-namics is well defined. We derive properties of the global forward equilibrium paths based on properties of the backward dynamics. We propose the framework of iterated function systems (IFS) to describe the set of forward equilibria and apply the IFS framework to a one-and a two-dimensional version of the overlapping generations (OLG)-model. We show that if the backward dynamics is chaotic and has a homo-clinic orbit (a "snap-back rep eller"), the set of forward equilibrium paths converges to a fractal attractor. Forward equilibria may be interpreted as sunspot equilibria, where a random sunspot sequence determines equilibrium selection at each date.

Suggested Citation

  • Laura Gardini & Cars Hommes & Fabio Tramontana & Robin de Vilder, 2009. "Forward and Backward Dynamics in implicitly defined Overl apping Generations Models," Post-Print hal-00693817, HAL.
    • Handle: RePEc:hal:journl:hal-00693817
    DOI: 10.1016/j.jebo.2008.09.010
    Note: View the original document on HAL open archive server: https://hal.science/hal-00693817
    as

    Download full text from publisher

    File URL: https://hal.science/hal-00693817/document
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jebo.2008.09.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arifovic, Jasmina & Hommes, Cars & Salle, Isabelle, 2019. "Learning to believe in simple equilibria in a complex OLG economy - evidence from the lab," Journal of Economic Theory, Elsevier, vol. 183(C), pages 106-182.

    More about this item

    Keywords

    E32; C62; C0 2; Forward and backward dynamics; Chaos; Homoclinic orbit; Snap-back repellor; Sunspot equilibria; Overlapping generations models;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C0 - Mathematical and Quantitative Methods - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00693817. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.