Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
973010 | Mathematical Social Sciences | 2010 | 25 Pages |
Abstract
We consider a two-sector overlapping generations model with homothetic preferences. Under standard conditions on technologies, upon large enough values for the share of first period consumption over the wage income, we prove that the dynamic efficiency and local uniqueness of the competitive equilibrium hold. On the contrary, for lower values of the share of first period consumption over the wage income which imply dynamic inefficiency of the steady state, local indeterminacy arises when the elasticity of intertemporal substitution in consumption is large enough.
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Physical Sciences and Engineering
Mathematics
Applied Mathematics
Authors
Jean-Pierre Drugeon, Carine Nourry, Alain Venditti,