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Existence and stability of overconsumption equilibria

Gregory Ponthiere ()

PSE Working Papers from HAL

Abstract: Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita, and, thus, with individual consumption, whatever the consumption level is. However, empirical evidence on the effect of overconsumption and obesity on mortality tends to question that postulate. This paper develops a two-period OLG model where life expectancy is a non-monotonic function of consumption. The existence, uniqueness and stability of steady-state equilibria are studied. It is shown that overconsumption equilibria - i.e. equilibria at which consumption exceeds the level maximizing life expectancy - exist in highly productive economies with a low impatience. Stability analysis highlights conditions under which there exist non-converging cycles in output and longevity around overconsumption equilibria.

Keywords: longevity; growth; overconsumption; obesity; OLG model (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge
Date: 2009-10
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00575015
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Related works:
Journal Article: Existence and stability of overconsumption equilibria (2011) Downloads
Journal Article: Existence and stability of overconsumption equilibria (2011) Downloads
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