IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Deviant generations, Ricardian equivalence, and growth cycles

Listed author(s):
  • Richard Barnett
  • Joydeep Bhattacharya

    ()

  • Helle Bunzel

Two equilibrium possibilities are known to obtain in a standard overlapping-generations model with dynastic preferences: either the altruistic bequest motive is operative for every generation (in which case, Ricardian equivalence obtains) or it is not, for any generation. Dynamic equilibria, where the bequest motive is occasionally operative, cannot emerge. This paper studies bequest-giving behavior and out-of-steady-state bequest and growth dynamics in a Ak model with intra- and inter-generational consumption externalities. These externalities, by their very presence, do not destroy Ricardian equivalence. They may, however, give rise to deviant generations—generations that do not leave a bequest having received an inheritance, and vice versa—and that seals the fate for Ricardian equivalence. Consumption externalities may also generate interesting indeterminacies and endogenous growth cycles that did not exist otherwise. Copyright Springer-Verlag 2013

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s00199-011-0645-3
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 52 (2013)
Issue (Month): 1 (January)
Pages: 367-396

as
in new window

Handle: RePEc:spr:joecth:v:52:y:2013:i:1:p:367-396
DOI: 10.1007/s00199-011-0645-3
Contact details of provider: Web page: http://www.springer.com

Web page: http://saet.uiowa.edu/

More information through EDIRC

Order Information: Web: http://www.springer.com/economics/economic+theory/journal/199/PS2

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.:

as in new window
  1. Jaime Alonso-Carrera & Jordi Caballé & Xavier Raurich, 2005. "Estate Taxes, Consumption Externalities, and Altruism," Working Papers 232, Barcelona Graduate School of Economics.
  2. Richard C. Barnett & Joydeep Bhattacharya & Helle Bunzel, 2007. "Resurrecting Equilibria Through Cycles," Economics Working Papers 2007-12, Department of Economics and Business Economics, Aarhus University.
  3. Barnett, Richard C. & Bhattacharya, Joydeep & Bunzel, Helle, 2007. "Minimum Consumption Requirements and Cycles in an Overlapping Generations Model of Money," Staff General Research Papers Archive 12834, Iowa State University, Department of Economics.
  4. Andrew B. Abel, 1987. "Operative Gift and Bequest Motives," NBER Working Papers 2331, National Bureau of Economic Research, Inc.
  5. S. Rao Aiyagari & Jeremy Greenwood & Ananth Seshadri, 2001. "Efficient Investment in Children," RCER Working Papers 481, University of Rochester - Center for Economic Research (RCER).
  6. George M. Constantinides & John B. Donaldson & Rajnish Mehra, 2005. "Junior is Rich: Bequests as Consumption," NBER Working Papers 11122, National Bureau of Economic Research, Inc.
  7. De La Croix, D. & Michel, P., 1997. "Optimal Growth when Tastes are Inherited," ASSET - Instituto De Economia Publica 168, ASSET (Association of Southern European Economic Theorists).
  8. Barnett, Richard C. & Bhattacharya, Joydeep, 2006. "Rejuveniles and Growth," Staff General Research Papers Archive 12653, Iowa State University, Department of Economics.
  9. Bruno Decreuse, 2001. "Dying of selfishness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 17(2), pages 481-488.
  10. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  11. Pedro Gomis Porqueras & Luca Bossi, 2010. "Fiscal Policy With Intertemporally Non-Separable Preferences," ANU Working Papers in Economics and Econometrics 2010-512, Australian National University, College of Business and Economics, School of Economics.
  12. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521806428, October.
  13. Barro, Robert J., 1974. "Are Government Bonds Net Wealth?," Scholarly Articles 3451399, Harvard University Department of Economics.
  14. Klaus Wälde, 2005. "Endogenous Growth Cycles," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 867-894, 08.
  15. Caballe, J., 1991. "Endogeneous Growth, Human Capital and Bequests in a Life-Cycle Model," UFAE and IAE Working Papers 158.91, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  16. Stockman, David R., 2010. "Balanced-budget rules: Chaos and deterministic sunspots," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1060-1085, May.
  17. Barnett, Richard C. & Bhattacharya, Joydeep & Bunzel, Helle, 2010. "Resurrecting Equilibria Through Cycles in an Overlapping Generations Model of Money," Staff General Research Papers Archive 32099, Iowa State University, Department of Economics.
  18. Dutta, Jayasri & Michel, Philippe, 1998. "The Distribution of Wealth with Imperfect Altruism," Journal of Economic Theory, Elsevier, vol. 82(2), pages 379-404, October.
  19. Gregory S. Amacher & Erkki Koskela & Markku Ollikainen & M. Christine Conway, 2002. "Bequest Intentions of Forest Landowners: Theory and Empirical Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1103-1114.
  20. Kiminori Matsuyama, 1999. "Growing Through Cycles," Econometrica, Econometric Society, vol. 67(2), pages 335-348, March.
  21. Aiyagari, S. Rao, 1992. "Co-existence of a representative agent type equilibrium with a non-representative agent type equilibrium," Journal of Economic Theory, Elsevier, vol. 57(1), pages 230-236.
  22. Akiomi Kitagawa & Akihisa Shibata, 2005. "Endogenous growth cycles in an overlapping generations model with investment gestation lags," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 751-762, 04.
  23. Andrew B. Abel, 2005. "Optimal Taxation when Consumers Have Endogenous Benchmark Levels of Consumption," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 21-42.
  24. Jagadeesh Gokhale & Laurence J. Kotlikoff, 2000. "The baby boomers' mega-inheritance-myth or reality?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Oct, pages -.
  25. Liu, Wen-Fang & Turnovsky, Stephen J., 2005. "Consumption externalities, production externalities, and long-run macroeconomic efficiency," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1097-1129, June.
  26. Weil, Philippe, 1987. "Love thy children : Reflections on the Barro debt neutrality theorem," Journal of Monetary Economics, Elsevier, vol. 19(3), pages 377-391, May.
  27. Emmanuel Thibault, 2000. "Existence of equilibrium in an OLG model with production and altruistic preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(3), pages 709-715.
  28. Abdelkrim Seghir & Juan Pablo Torres-Martinez, 2006. "Wealth transfers and the role of collateral when lifetimes are uncertain," Textos para discussão 527, Department of Economics PUC-Rio (Brazil).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:spr:joecth:v:52:y:2013:i:1:p:367-396. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.