Fluctuations in overlapping generations economies

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Abstract

In the present paper stationary pure-exchange overlapping generations economies with L goods per date and M consumers per generation are considered. It is shown that for an open and dense set of utility functions there exist endowment vectors such that N-cycles exist for N less than or equal to L+1 and L less than or equal to M. The approach to existence of endogenous fluctuations is basic in the sense that the prime ingredients are the implicit function theorem and linear algebra. Moreover it is sketched how the approach can be applied to show that for an open and dense set of utility functions there exist endowment vectors such that sunspot equilibria, where prices at every date only depends on the state at that date, exist.

Original languageEnglish (US)
Article number16
JournalB.E. Journal of Theoretical Economics
Volume9
Issue number1
DOIs
StatePublished - 2009

Keywords

  • Cycles
  • Overlapping generations economies
  • Sunspot equilibria

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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