COMPETITIVE GROWTH IN A LIFE-CYCLE MODEL: EXISTENCE AND DYNAMICS

Hippolyte d'Albis and Emmanuelle Augeraud-Véron

International Economic Review, 2009, vol. 50, issue 2, 459-484

Abstract: The dynamic behavior of the capital growth rate is analyzed using an overlapping-generations model with continuous trading. Assuming a technology satisfying constant social returns to capital, the equilibrium growth rate is piecewise-defined by functional differential equations with both delayed and advanced terms. The main result concerns the existence of a solution expressed as a series of exponentials, which is shown to crucially depend on the initial wealth distribution among cohorts. Upon existence, the dynamics of the capital growth rate has a saddle-point trajectory that converges to a unique steady state. Along the transition path, the growth rate exhibits exponentially decreasing oscillations. Copyright © (2009) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 2009
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Related works:
Working Paper: Competitive Growth in a Life-cycle Model: Existence and Dynamics (2009)
Working Paper: Competitive Growth in a Life-cycle Model: Existence and Dynamics (2007)
Working Paper: Competitive growth in a life-cycle model: existence and dynamics (2004)
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