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Fluctuations in Overlapping Generations Economies

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  • Mich Tvede

    (Department of Economics, University of Copenhagen)

Abstract

In the present paper stationary pure-exchange overlapping generations economies with l goods per date and m consumers per generation are considered. It is shown that for an open and dense set of utility functions there exist endowment vectors such that n-cycles exist for n ≤ l +1 and l ≤ m. The approach to existence of endogenous fluctuations is basic in the sense that the prime ingredients are the implicit function theorem and linear algebra. Moreover the approach is applied to show that for an open and dense set of utility functions there exist endowment vectors such that sunspot equilibria, where prices at every date only depends on the state at that date, exist.

Suggested Citation

  • Mich Tvede, 2009. "Fluctuations in Overlapping Generations Economies," Discussion Papers 09-05, University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:kuiedp:0905
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    References listed on IDEAS

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    More about this item

    Keywords

    cycles; overlapping generations economies; sunspot equilibria;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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