Equilibria in an overlapping generations model with transfer policies and exogenous growth

Jean-François Mertens and Anna Rubinchik ()

Economic Theory, 2013, vol. 54, issue 3, 537-595

Abstract: For an overlapping generations economy with varying life-cycle productivity, non-stationary endowments, continuous time starting at $$-\infty $$ (hence allowing for full anticipation), constant-returns-to-scale production and ces utility, we fully characterise equilibria where output is higher than investment, which is strictly positive. Net assets (aggregate savings minus the value of the capital stock) are constant in any equilibrium, and, for balanced growth equilibria ( bge, defined for an economy with stationary endowments), net assets are non-zero only in the golden rule equilibrium, in accord with Gale ( 1973 ). The number of bge is finite. Their parity, however, depends on the life-cycle productivity, in particular, on the relation between the intertemporal elasticity of substitution, the minimal working age and the minimal tax age. Copyright Springer-Verlag Berlin Heidelberg 2013

Keywords: Infinite economies; Overlapping generations; Exogenous growth; D50; E20 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Working Paper: Equilibria in an overlapping generations model with transfer policies and exogenous growth (2012)
Working Paper: Equilibria in an overlapping generations model with transfer policies and exogenous growth
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DOI: 10.1007/s00199-012-0725-z

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