The dynamics of efficient intertemporal allocations with many agents, recursive preferences, and production

Jess Benhabib, Saqib Jafarey, Kazuo Nishimura

    Research output: Contribution to journalArticle


    The local dynamics of efficient allocations are studied for heterogeneous-agent economies with production where preferences are recursive but not time-separable. In the case of a one-sector neoclassical technology, it is shown that optimal trajectories locally converge to a unique steady state, provided that every agent's utility satisfies normality and increasing marginal impatience conditions. In the two-sector case, with the above restrictions on preferences, it is shown that oscillations can result only if the consumption goods sector is sufficiently capital intensive.

    Original languageEnglish (US)
    Pages (from-to)301-320
    Number of pages20
    JournalJournal of Economic Theory
    Issue number2
    StatePublished - Apr 1988


    ASJC Scopus subject areas

    • Economics and Econometrics

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