Endogenous Business Cycles In Overlapping-Generations Economies With Multiple Consumption Goods
We consider an overlapping-generations economy with two consumption goods. There are two sectors that produce a pure consumption good and a mixed good that can be either consumed or used as capital. We prove that the existence of Pareto-optimal expectations-driven fluctuations is compatible with standard sectoral technologies if the share of the pure consumption good is low enough. Following Reichlin's [ Journal of Economic Theory 40 (1986), 89–102] influential conclusion, this result suggests that some fiscal policy rules can prevent business-cycle fluctuations in the economy by driving it to the optimal steady state as soon as they are announced.
Volume (Year): 16 (2012)
Issue (Month): S1 (April)
|Contact details of provider:|| Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK|
Web page: http://journals.cambridge.org/jid_MDY
References listed on IDEAS
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.:
- Kalra, Sanjay, 1996. "Cyclical equilibria in multi-sector productive economies: The role of substitution and factor intensity," Journal of Economic Dynamics and Control, Elsevier, vol. 20(9-10), pages 1709-1729.
- Nourry, Carine & Venditti, Alain, 2011.
"Local indeterminacy under dynamic efficiency in a two-sector overlapping generations economy,"
Journal of Mathematical Economics,
Elsevier, vol. 47(2), pages 164-169, March.
- Carine Nourry & Alain Venditti, 2009. "Local indeterminacy under dynamic efficiency in a two-sector overlapping generations economy," Working Papers halshs-00439240, HAL.
- Grandmont, Jean-Michel & Pintus, Patrick & de Vilder, Robin, 1998. "Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles," Journal of Economic Theory, Elsevier, vol. 80(1), pages 14-59, May.
- GRANDMONT, Jean-Michel & PINTUS, Patrick & de VILDER, Robin, 1997. "Capital-labor substitution and competitive nonlinear endogenous business cycles," CORE Discussion Papers 1997087, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean-Michel Grandmont & P, A, Pintus & R, De Vilder, 1997. "Capital-Labor Substitution and Competitive Nonlinear Endogenous Business Cycles," Working Papers 97-28, Centre de Recherche en Economie et Statistique.
- Cazzavillan, Guido & Pintus, Patrick, 2007. "Dynamic inefficiency in an overlapping generations economy with production," Journal of Economic Theory, Elsevier, vol. 137(1), pages 754-759, November.
- Guido Cazzavillan & Patrick Pintus, 2006. "Dynamic Inefficiency in an Overlapping Generations Economy with Production," Working Papers 2006_40, Department of Economics, University of Venice "Ca' Foscari".
- Drugeon, Jean-Pierre & Nourry, Carine & Venditti, Alain, 2010. "On efficiency and local uniqueness in two-sector OLG economies," Mathematical Social Sciences, Elsevier, vol. 59(1), pages 120-144, January.
- Jean-Pierre Drugeon & Carine Nourry & Alain Venditti, 2009. "On efficiency and local uniqueness in two-sector OLG economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00439241, HAL.
- Alain Venditti & Carine Nourry & Jean-Pierre Drugeon, 2010. "On Efficiency and Local Uniqueness in Two-Sector OLG Economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00688830, HAL.
- Galor, Oded, 1992. "A Two-Sector Overlapping-Generations Model: A Global Characterization of the Dynamical System," Econometrica, Econometric Society, vol. 60(6), pages 1351-1386, November.
- Cass, David & Shell, Karl, 1983. "Do Sunspots Matter?," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 193-227, April.
- Reichlin, Pietro, 1986. "Equilibrium cycles in an overlapping generations economy with production," Journal of Economic Theory, Elsevier, vol. 40(1), pages 89-102, October.
- Venditti, Alain, 2005. "The two sector overlapping generations model: A simple formulation," Research in Economics, Elsevier, vol. 59(2), pages 164-188, June. Full references (including those not matched with items on IDEAS)