Dynamic Efficiency in a Two-Sector Overlapping Generations Model

Partha Sen

CRIEFF Discussion Papers from Centre for Research into Industry, Enterprise, Finance and the Firm

Abstract: This paper looks at the conditions under which we may have welfare improving capital accumulation in two-sector two-period overlapping generations models. It is found that both the usual conditions of the rate of interest exceeding the population growth rate and profits exceeding investment may give misleading answers. Finally, there is also the possibility of asset bubbles, even with dynamic efficiency.

Keywords: Overacumulation; overlapping generations; dynamic efficiency; asset bubbles (search for similar items in EconPapers)
JEL-codes: D91 E44 O41 (search for similar items in EconPapers)
Date: 1997-10
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Persistent link: https://EconPapers.repec.org/RePEc:san:crieff:9704

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