On the Convergence Criterion in Three-Period-Lived Overlapping Generations Models

Jean-Paul Barinci (), Hye-Jin Cho () and Jean-Pierre Drugeon ()
Additional contact information
Jean-Paul Barinci: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay
Hye-Jin Cho: Durham University
Jean-Pierre Drugeon: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique

PSE Working Papers from HAL

Abstract: This article considers a three-period-lived pure exchange overlapping generations economy and clarifies the role of market complementarities in the scope for Kehoe & Levine's convergence criterion in order to reduce the size of continuation equilibria and establish uniqueness and determinacy. The argument is based upon the price-relatedness of dated goods and the way the law of demand, gross substitutability and the scope for asymmetric complementarities come into play when three periods lifespans are considered. The nature of these restriions is clarified in the context of stationary economies and the way it relates to equilibrium continuation and Kehoe & Levine's determinacy is made precise. A detailed articulation between complementarities and determinacy is finally provided in the context of Samuelson intermediate economies. The key role of dated goods spaced one period apart and entering in an additive way is emphasised in the determinacy result while the importance of asymetric complementarities between isolated goods spaced two periods apart is also pointed out.

Keywords: Continuation equilibria and Kehoe &; Levine's convergence criterion; Determinacy; Indeterminacies; Robustness; Overlapping generations; Gross substitutability; Complementarity; Aggregate demand; Comparative statics (search for similar items in EconPapers)
Date: 2024-12
New Economics Papers: this item is included in nep-dge
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04850529v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-04850529v1/document (application/pdf)

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:hal:psewpa:halshs-04850529

Access Statistics for this paper

More papers in PSE Working Papers from HAL
Bibliographic data for series maintained by CCSD ().