# Equilibria in an overlapping generations model with transfer policies and exogenous growth

## Author Info

Listed author(s):
• Jean-François Mertens
• Anna Rubinchik

()

Registered author(s):

## Abstract

For an overlapping generations economy with varying life-cycle productivity, non-stationary endowments, continuous time starting at $$-\infty$$ (hence allowing for full anticipation), constant-returns-to-scale production and ces utility, we fully characterise equilibria where output is higher than investment, which is strictly positive. Net assets (aggregate savings minus the value of the capital stock) are constant in any equilibrium, and, for balanced growth equilibria ( bge, defined for an economy with stationary endowments), net assets are non-zero only in the golden rule equilibrium, in accord with Gale ( 1973 ). The number of bge is finite. Their parity, however, depends on the life-cycle productivity, in particular, on the relation between the intertemporal elasticity of substitution, the minimal working age and the minimal tax age. Copyright Springer-Verlag Berlin Heidelberg 2013

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## Bibliographic Info

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

Volume (Year): 54 (2013)
Issue (Month): 3 (November)
Pages: 537-595

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 Handle: RePEc:spr:joecth:v:54:y:2013:i:3:p:537-595 DOI: 10.1007/s00199-012-0725-z Contact details of provider: Web page: http://www.springer.com Order Information: Web: http://www.springer.com/economics/economic+theory/journal/199/PS2

## References

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1. Fleurbaey,Marc & Maniquet,FranÃ§ois, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, December.
2. Hippolyte d'Albis & Emmanuelle Augeraud-véron, 2009. "Competitive Growth In A Life-Cycle Model: Existence And Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 459-484, 05.
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4. Subir K. Chattopadhyay, 1996. "Pareto optimal improvements for sunspots: The golden rule as a target for stabilization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 123-135.
5. Kehoe, Timothy J. & Levine, David K., 1984. "Regularity in overlapping generations exchange economies," Journal of Mathematical Economics, Elsevier, vol. 13(1), pages 69-93, April.
6. Kehoe, Timothy J & Levine, David K, 1985. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Econometrica, Econometric Society, vol. 53(2), pages 433-453, March.
7. Mertens, Jean-Francois & Rubinchik, Anna, "undated". "Separate control over the local and the asymptotic behaviour in L_p spaces," Working Papers WP2011/1, University of Haifa, Department of Economics.
8. Chattopadhyay, Subir K, 1996. "Pareto Optimal Improvements for Sunspots: The Golden Rule as a Target for Stabilization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 123-135, June.
9. Gale, David, 1973. "Pure exchange equilibrium of dynamic economic models," Journal of Economic Theory, Elsevier, vol. 6(1), pages 12-36, February.
10. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467-467.
11. repec:cor:louvrp:-2438 is not listed on IDEAS
12. Mertens, Jean-François & Rubinchik, Anna, 2012. "Intergenerational Equity And The Discount Rate For Policy Analysis," Macroeconomic Dynamics, Cambridge University Press, vol. 16(01), pages 61-93, February.
13. Duranton, Gilles & Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2010. "The Economics of Clusters: Lessons from the French Experience," OUP Catalogue, Oxford University Press, number 9780199592203, April.
14. Mertens, Jean-François & Rubinchik, Anna, 2015. "Pareto Optimality Of The Golden Rule Equilibrium In An Overlapping Generations Model With Production And Transfers," Macroeconomic Dynamics, Cambridge University Press, vol. 19(08), pages 1780-1799, December.
15. Gan, Zhuojiong & Lau, Sau-Him Paul, 2010. "Demographic structure and overlapping generations: A simpler proof with more general conditions," Journal of Mathematical Economics, Elsevier, vol. 46(3), pages 311-319, May.
16. Burke, Jonathan L., 1990. "A benchmark for comparative dynamics and determinacy in overlapping-generations economies," Journal of Economic Theory, Elsevier, vol. 52(2), pages 268-303, December.
17. Antoine Bommier & Ronald D. Lee, 2003. "Overlapping generations models with realistic demography," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 135-160, 02.
18. MERTENS, Jean-François & RUBINCHIK, Anna, 2009. "Regularity and stability of equilibria in an overlapping generations model with exogenous growth," CORE Discussion Papers 2009005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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