Dynamic Properties and Pareto Efficiency of Equilibria in OLG Models

Alfredo Medio
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Alfredo Medio: Université Côte d'Azur, France

No 2016-37, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: In this paper, we discuss the problem of Pareto efficiency/inefficiency in a family of two-period, pure exchange model of overlapping generations models (OLG). Making use of a known necessary and sucient condition for efficiency of an intertemporal OLG equilibrium, the so-called "Cass Criterion", we establish a systematic relation between efficiency/inefficiency of equilibria and the dynamical properties of the forward-in-time dynamics characterizing the different types of OLG models belonging to the generalclass considered in the paper. In so doing, we discuss two generally neglected questions, namely: (i) the "backward dynamics" problem arising in OLG models of the Samuelson type; and (ii) for OLG models yielding multiple intertemporal equilibria of different types, the problem of determining which of them are typical or exceptional.

Keywords: Overlapping Generations; Pareto-Efficiency; Dynamic Properties (search for similar items in EconPapers)
JEL-codes: C61 D50 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-12
New Economics Papers: this item is included in nep-dge
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