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Equilibrium price dynamics in an overlapping-generations exchange economy

  • Brito, Paulo
  • Dilão, Rui

An extension to the Yaari (1965)-Blanchard (1985) continuous time overlapping generations model for an endowment Arrow-Debreu economy with an age-structured population is presented. It is proved that Arrow-Debreu equilibrium prices are represented by a double linear integral equation, and depend on the age-distributions of population and endowments. For an economy with a balanced growth, and logarithmic utility, we prove that bubbles may exist if endowments are distributed earlier than some critical age.

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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 46 (2010)
Issue (Month): 3 (May)
Pages: 343-355

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Handle: RePEc:eee:mateco:v:46:y:2010:i:3:p:343-355
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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