The relationship between general equilibrium models with infinite-lived agents and overlapping generations models, and some applications

Ngoc-Sang Pham

Working Papers from HAL

Abstract: We prove that a two-cycle equilibrium in a general equilibrium model with infinitely-lived agents (GEILA) constitutes an equilibrium in an overlapping generations (OLG) model. Conversely, an equilibrium in an OLG model that satisfies additional conditions is part of an equilibrium in a GEILA model. Our framework, which includes three assets (physical capital, a Lucas tree, and fiat money), encompasses both exchange and production economies. As an application, we demonstrate that equilibrium indeterminacy and rational asset price bubbles can arise not only in OLG models but also in GEILA models.

Keywords: infinite-horizon; general equilibrium; overlapping generations; asset price bubble; equilibrium indeterminacy (search for similar items in EconPapers)
Date: 2024-11-11
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Working Paper: The relationship between general equilibrium models with infinite-lived agents and overlapping generations models, and some applications (2026)
Working Paper: The relationship between general equilibrium models with infinite-lived agents and overlapping generations models, and some applications (2024)
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