Uniqueness of Steady States in Models with Overlapping Generations

Felix Kubler and Karl Schmedders

Journal of the European Economic Association, 2010, vol. 8, issue 2-3, 635-644

Abstract: In this paper we examine the likelihood of multiple real steady states in deterministic exchange economies with overlapping generations. There is a single good and a single agent per generation with constant relative risk aversion expected utility. In order to test for multiple equilibria we employ methods from computational algebraic geometry. In our examples, we find that multiplicity becomes less likely as the life span of agents increases but becomes more likely as the coefficient of risk aversion increases. For moderate values of risk aversion, multiplicity is very unlikely when agents live for five or more periods. (JEL: C61, C63, D50, D58) (c) 2010 by the European Economic Association.

JEL-codes: C61 C63 D50 D58 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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