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

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For an overlapping generations economy with varying life-cycle productivity, non-stationary endowments, continuous time starting at infinity (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.

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  • Mertens, Jean-Francois & Rubinchik, Anna, "undated". "Equilibria in an overlapping generations model with transfer policies and exogenous growth," Working Papers WP2012/5, University of Haifa, Department of Economics.
  • Handle: RePEc:haf:huedwp:wp201205
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    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. Gorokhovsky, Alexander & Rubinchik, Anna, 2022. "Necessary and sufficient conditions for determinacy of asymptotically stationary equilibria in OLG models," Journal of Economic Theory, Elsevier, vol. 204(C).
    3. 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.
    4. 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(8), pages 1780-1799, December.
    5. 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.
    6. 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.

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    More about this item

    Keywords

    Infinite Economies; Overlapping Generations; Exogenous Growth;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

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