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Recycling waste and endogenous fluctuations in an OLG model


  • Mouez Fodha
  • Francesco Magris


type="main" xml:lang="en"> We study an overlapping generations model composed of two productive sectors: the first produces a virgin good and the second recycles a good from a previous period. When the profit of the recycling sector is in its increasing region, endogenous fluctuations emerge through a flip bifurcation when leisure and consumption are complementary. Conversely, when profit is in its decreasing region, deterministic cycles emerge also under the gross substitutability assumption. The steady state becomes indeterminate through a flip or a Hopf bifurcation, provided leisure and consumption are complements. We also study the social optimum and the altruistic market economy.

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  • Mouez Fodha & Francesco Magris, 2015. "Recycling waste and endogenous fluctuations in an OLG model," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(4), pages 405-427, December.
  • Handle: RePEc:bla:ijethy:v:11:y:2015:i:4:p:405-427

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    References listed on IDEAS

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