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

## Author

Listed:
• Jean-François Mertens
• Anna Rubinchik

()

## 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

## Suggested Citation

• Jean-François Mertens & Anna Rubinchik, 2013. "Equilibria in an overlapping generations model with transfer policies and exogenous growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 537-595, November.
• Handle: RePEc:spr:joecth:v:54:y:2013:i:3:p:537-595
DOI: 10.1007/s00199-012-0725-z
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File URL: http://hdl.handle.net/10.1007/s00199-012-0725-z

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## References listed on IDEAS

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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.
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Full references (including those not matched with items on IDEAS)

## Citations

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Cited by:

1. d’Albis, Hippolyte & Augeraud-Véron, Emmanuelle & Hupkes, Hermen Jan, 2015. "Local determinacy of prices in an overlapping generations model with continuous trading," Journal of Mathematical Economics, Elsevier, vol. 58(C), pages 16-24.
2. Mertens, Jean-François & Rubinchik, Anna, 2014. "Essential properties of Lp,q spaces (the amalgams) and the implicit function theorem for equilibrium analysis in continuous time," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 187-196.
3. 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.
4. Gorokhovsky, Alexander & Rubinchik, Anna, 2018. "Regularity of a general equilibrium in a model with infinite past and future," Journal of Mathematical Economics, Elsevier, vol. 74(C), pages 35-45.
5. Jochen Mierau & Stephen Turnovsky, 2014. "Demography, growth, and inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 29-68, January.

### Keywords

Infinite economies; Overlapping generations; Exogenous growth; D50; E20;

### JEL classification:

• D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
• E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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