Optimal Policy in OG Models

Christian Ghiglino and Mich Tvede

No 99-23, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: In the present paper general stationary overlapping generations economies with many commodities in every period and many different consumers in every generation are considered. A government maximizes an utilitarian social welfare function, that is the sum of weighted averages of utilities for generations, through fiscal policy, i.e. monetary transfers and taxes. Both situations with and without time discounting are considered. It is shown that if the discount factor is sufficiently close to one then the optimal policy stabilizes the economy, i.e. the equilibrium path has the turnpike property. Moreover the fiscal policy is shown to be time-consistent.

Keywords: overlapping generations economies; economic policy; turnpike property; discounting (search for similar items in EconPapers)
JEL-codes: D51 D91 E32 E52 H20 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1999-10
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Optimal Policy in OG Models (2000)
Working Paper: Optimal Policy in OG Models (1999)
Working Paper: Optimal policy in OG models (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9923

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