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Competitive growth in a life-cycle model : existence and dynamics

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Author Info
Hippolyte d'Albis () (EUREQua)
Emmanuelle Augeraud-Veron () (LMA et EUREQua)

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Abstract

In this paper, the dynamic behaviour of the capital growth rate is analyzed using an overlapping-generations model with continuous trading and finitely lived agents. Assuming a technology satisfying constant returns to capital, the equilibrium growth rate is piecewise-defined by functional differential equations with both delayed and advanced terms. The existence of a solution expressed as a series of exponentials crucially depends on the initial wealth distribution among cohorts. Upon existence, the dynamics of the capital growth rate has a saddle-point trajectory that converges to a unique steady-state. Along the transition path, the growth rate exhibits exponentially decreasing oscillations.

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Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number v04016.

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Length: 28 pages
Date of creation: Feb 2004
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Handle: RePEc:mse:wpsorb:v04016

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Related research
Keywords: Overlapping-generations models; endogenous growth; functional differential equations of mixed type.;

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Find related papers by JEL classification:
D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
D90 - Microeconomics - - Intertemporal Choice and Growth - - - General

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. D'ALBIS Hippolyte & AUGERAUD-VERON Emmanuelle, 2007. "Endogenous Retirement and Monetary Cycles," Working Papers 07.14.235, LERNA, University of Toulouse. [Downloadable!]
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