Hostname: page-component-6898cfcb55-zsp5v Total loading time: 0 Render date: 2026-11-11T22:07:05.490Z Has data issue: false hasContentIssue false
  • English
  • Français

EXISTENCE AND UNIQUENESS OF STEADY-STATE EQUILIBRIUM IN A GENERALIZED OVERLAPPING GENERATIONS MODEL

Published online by Cambridge University Press:  09 June 2011

Jinlu Li and
Shuanglin Lin
Jinlu Li*
Affiliation:
Shawnee State University
Shuanglin Lin
Affiliation:
Peking University and University of Nebraska at Omaha
*
Address correspondence to: Jinlu Li, Department of Mathematics, Shawnee State University, Portsmouth, OH 45662, USA; e-mail: jli@shawnee.edu.
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the 'Save PDF' action button.

Galor and Ryder [Journal of Economic Theory 49 (1989), 360–375] establish conditions for the existence of equilibrium in a Diamond-type overlapping-generations (OLG) model. Although theoretically appealing, these conditions are implicit and not convenient to apply. This paper provides explicit and easily applied conditions for the existence and uniqueness of steady-state equilibrium, with which one only needs to check the first derivatives of the production and utility functions and their interactions, with no need to solve the optimization problem. Our theorems on the existence and uniqueness of steady-state equilibrium can be applied to a larger class of OLG models that do not require second-order differentiability of the production and utility functions. We present examples to show how to check the existence and uniqueness of equilibrium.

Keywords

ExistenceUniquenessEquilibriumGeneralized Overlapping-Generations Model

Information

Type
Articles
Information
Macroeconomic Dynamics , Volume 16 , Supplement S3 , November 2012, pp. 299 - 311
Copyright
Copyright © Cambridge University Press 2011

References

REFERENCES

Allais, Maurice Félix Charles (1947) Economie et Interet. Paris: Imprimerie Nationale.Google Scholar
Boldrin, Michele (1992) Dynamic externalities, multiple equilibria, and growth. Journal of Economic Theory 58, 198–218.CrossRefGoogle Scholar
Diamond, Peter A. (1965) National debt in a neoclassical growth model. American Economic Review 55, 1126–1150.Google Scholar
Galor, Oded (1992) A two-sector overlapping generations-model: A global characterization of the dynamical system. Econometrica 60, 1351–1386.CrossRefGoogle Scholar
Galor, Oded and Ryder, Harl E. (1988), Multiplicity of Locally Stable Steady-State Equilibria in an Overlapping-Generations Model with Productive Capital: Characterization of CES Production Functions. Department of Economics, Brown University, 1988.Google Scholar
Galor, Oded and Ryder, Harl E. (1989) Existence, uniqueness, and stability of equilibrium in an overlapping-generations model with productive capital. Journal of Economic Theory 49, 360–375.CrossRefGoogle Scholar
Galor, Oded and Ryder, Harl E. (1991) Dynamic efficiency of steady-state equilibria in an overlapping-generations model with productive capital. Economics Letters 35, 385–390.CrossRefGoogle Scholar
Ihori, Toshihiro (1978) The golden rule and the role of government in a life cycle model. American Economic Review 68, 389–396.Google Scholar
Jones, Larry E. and Manuelli, Rodolfo E. (1992) Finite lifetimes and growth. Journal of Economic Theory 58, 171–197.CrossRefGoogle Scholar
Konishi, Hideo and Perera-Tallo, Fernando (1997) Existence of steady-state equilibrium in an overlapping-generations model with production. Economic Theory 9, 529–537.Google Scholar
Li, Jinlu and Lin, Shuanglin (2008) Existence of steady-state equilibrium in a two-sector overlapping generations model. Journal of Economic Theory 141, 255–275.CrossRefGoogle Scholar
McCallum, Bennett T. (1983) The role of overlapping-generations models in monetary economics. Carnegie–Rochester Conference Series on Public Policy 18, 9–44.CrossRefGoogle Scholar
Samuelson, Paul Anthony (1958) An exact consumption-loans model of interest with or without the social contrivance of money. Journal of Political of Economy 66, 467–482.CrossRefGoogle Scholar
Tirole, Jean (1985) Asset bubbles and overlapping generations. Econometrica 53, 1071–1100.CrossRefGoogle Scholar
Weil, Philippe (1987) Confidence and the real value of money in an overlapping generations economy. Quarterly Journal of Economics 102, 1–22.CrossRefGoogle Scholar
Yong, Wang (1993) Stationary equilibria in an overlapping generations economy with stochastic production. Journal of Economic Theory 61, 423–435.Google Scholar