Recycling waste and endogenous fluctuations in an OLG model

Mouez Fodha and Francesco Magris

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Abstract: We study an overlapping generations model composed of two productive sectors: the first produces a virgin good and the second recycles a good from a previous period. When the profit of the recycling sector is in its increasing region, endogenous fluctuations emerge through a flip bifurcation when leisure and consumption are complementary. Conversely, when profit is in its decreasing region, deterministic cycles emerge also under the gross substitutability assumption. The steady state becomes indeterminate through a flip or a Hopf bifurcation, provided leisure and consumption are complements. We also study the social optimum and the altruistic market economy.

Keywords: endogenous fluctuations; recycling activity; optimal policy; altruism (search for similar items in EconPapers)
Date: 2015-12
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Citations: View citations in EconPapers (4)

Published in International Journal of Economic Theory, 2015, 11 (4), pp.405-427. ⟨10.1111/ijet.12073⟩

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Related works:
Journal Article: Recycling waste and endogenous fluctuations in an OLG model (2015)
Working Paper: Recycling waste and endogenous fluctuations in an OLG model (2015)
Working Paper: Recycling waste and endogenous fluctuations in an OLG model (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01308387

DOI: 10.1111/ijet.12073

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