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Equilibrium price dynamics in an overlapping-generations exchange economy

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  • Paulo Brito
  • Rui Dilao

Abstract

We present a continuous time overlapping generations model for an endowment Arrow-Debreu economy with an age-structured population. For an economy with a balanced growth path, we prove that Arrow-Debreu equilibrium prices exist, and their dynamic properties are age-dependent. Our model allows for an explicit dependence of prices on critical age-specific endowment parameters. We show that, if endowments are distributed earlier than some critical age, then speculative bubbles for prices do exist.

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Bibliographic Info

Paper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2006/27.

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Date of creation: 2006
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Handle: RePEc:ise:isegwp:wp272006

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Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC

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Keywords: Arrow-Debreu equilibrium; overlapping generations models; McKendrick model.;

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Citations

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Cited by:
  1. Sun, Ruoyan, 2013. "Kinetics of jobs in multi-link cities with migration-driven aggregation process," Economic Modelling, Elsevier, vol. 30(C), pages 36-41.
  2. Brito, Paulo, 2008. "Equilibrium asset prices and bubbles in a continuous time OLG model," MPRA Paper 10701, University Library of Munich, Germany.
  3. D'ALBIS Hippolyte & AUGERAUD-VÉRON Emmanuelle, 2009. "Continuous-Time Overlapping Generations Models," LERNA Working Papers 09.15.291, LERNA, University of Toulouse.
  4. Hippolyte D'Albis & Emmanuelle Augeraud-Véron & Katheline Schubert, 2010. "Demographic-economic equilibria when the age at motherhood is endogenous," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00547274, HAL.

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