Altruism and Determinacy of Equilibria in Overlapping Generations Models with Externalities

Alain Venditti

The Japanese Economic Review, 2003, vol. 54, issue 2, 179-202

Abstract: This paper deals with an OLG model with production and a single commodity, in which agents are assumed altruistic and the aggregate production function contains external effects. I prove that, if the technology satisfies a minor assumption, which encompasses positive and negative externalities, some curvature conditions on the utility function ensure local determinacy of stationary and period 2 equilibria. I prove that non‐separable, strictly concave preferences are a fundamental ingredient for the occurrence of indeterminate equilibria. Finally, considering the case of unbounded growth, I establish that for any utility and production functions a unique balanced growth path is globally determinate. JEL Classification Numbers: C62, E32

Date: 2003
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https://doi.org/10.1111/1468-5876.t01-1-00253

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Working Paper: Altruism and Determinacy of Equilibria in Overlapping Generations Models with Externalities (1995)
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