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Can Heterogeneous Preferences Stabilize Endogenous Fluctuations?

Author

Listed:
  • Stefano Bosi

    () (EPEE, Université d’Evry)

  • Thomas Seegmuller

    () (CNRS and EUREQua)

Abstract

While most of the literature concerned with indeterminacy considers a representative agent, some recent works have investigated the role of heterogenous agents on dynamics. This paper adds a contribution to the debate, stressing the effects of heterogeneity in consumers’ preferences within an overlapping generations economy with capital accumulation and consumption in both periods. We show that such an heterogeneity can stabilize fluctuations in many cases, by simply reducing the range of parameters compatible with indeterminacy.

Suggested Citation

  • Stefano Bosi & Thomas Seegmuller, 2005. "Can Heterogeneous Preferences Stabilize Endogenous Fluctuations?," Documents de recherche 05-09, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
  • Handle: RePEc:eve:wpaper:05-09
    as

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    File URL: http://epee.univ-evry.fr/RePEc/2005/05-09.pdf
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    References listed on IDEAS

    as
    1. Christian Ghiglino & Marielle Olszak-Duquenne, 2005. "On The Impact Of Heterogeneity On Indeterminacy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 171-188, February.
    2. Ghiglino, Christian & Tvede, Mich, 1995. "Endowments, stability, and fluctuations in OG models," Journal of Economic Dynamics and Control, Elsevier, vol. 19(3), pages 621-653, April.
    3. Ghiglino, Christian & Sorger, Gerhard, 2002. "Poverty Traps, Indeterminacy, and the Wealth Distribution," Journal of Economic Theory, Elsevier, vol. 105(1), pages 120-139, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Endogenous fluctuations; heterogeneous preferences; overlapping generations;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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