Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences
|Author:||Koskela, Erkki; Puhakka, Mikko1|
1University of Oulu, Oulu Business School, Department of Economics
|Online Access:||PDF Full Text (PDF, 1 MB)|
|Persistent link:|| http://urn.fi/urn:nbn:fi-fe200802011063
|Publish Date:|| 2008-02-01
We explore dynamics in an OG economy under pure exchange and Stone-Geary preferences with positive level of saving and non-negative public debt and a relatively small second period endowment. We show the existence of a nontrivial steady state, which is either determinate or indeterminate. Furthermore, and importantly, there can be only two cycles, but no cycles of higher order.
University of Oulu, Department of Economics, Working papers
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