Competitive Growth in a Life-cycle Model: Existence and Dynamics
Hippolyte d'Albis () and
Emmanuelle Augeraud-Véron ()
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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.
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Published in International Economic Review, Wiley, 2009, 50 (2), pp.459-484. <10.1111/j.1468-2354.2009.00537.x>
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Journal Article: 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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