Quasi-Periodic Motions in a Polarized Overlapping Generations Model with Technology Choice

Takao Asano (), Akihisa Shibata and Masanori Yokoo ()
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Takao Asano: Okayama University
Masanori Yokoo: Okayama University

No 1070, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: This paper constructs a simple overlapping generations (OLG) model with the working and capitalist classes and two types of production technologies. The behavior of agents belonging to the working class is basically the same as that in the standard Diamond (1965) type OLG model, whereas agents belonging to the capitalist class face two available technologies, select the one with a higher return on capital, and bequeath their assets to the next generation without supplying labor. Using techniques concerning the circle map in dynamical systems theory, we show that in an extreme case in which one technology is linear and the other is of the Leontief type, the economy exhibits bounded, non-periodic but non-chaotic motions for a large set of parameter values. We provide explicit formulas for the rotation number and the absolutely continuous invariant probability measure of our model.

Keywords: Endogenous business cycles; technology choice; quasi-periodic motion; OLG model; rotation numbe (search for similar items in EconPapers)
Pages: 45pages
Date: 2021-11
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (1)

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