Indeterminacy of intertemporal equilibria under imperfect competition

Leo Kaas

Economic Theory, 2001, vol. 17, issue 2, 307-323

Abstract: It is known that overlapping generations models with imperfectly competitive firms may exhibit a continuum of stationary equilibria. The reason of this indeterminacy is that different price expectation functions of consumers lead to different objective demand functions against which firms maximize. All these expectation functions fulfill perfect foresight in the equilibrium, but they can be arbitrary off the equilibrium. In this paper it is shown that it is not this arbitrariness which is responsible for the indeterminacy, but that the continuum of stationary equilibria emerges even if expectation functions are rational.

Keywords: Overlapping generations model; Imperfect competition; Indeterminacy; Expectations. (search for similar items in EconPapers)
JEL-codes: D43 D84 D91 (search for similar items in EconPapers)
Date: 2000-11-14
Note: Received: March 25, 1999; revised version: February 16, 2000
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.de/link/service/journals/00199/papers/1017002/10170307.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:17:y:2001:i:2:p:307-323

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().