2 edition of Indeterminacy of relative prices in overlapping generations models found in the catalog.
1983 by Dept. of Economics, Massachusetts Institute of Technology in Cambridge, Mass .
Written in English
|Other titles||Overlapping generations models, Indeterminacy of relative prices in.|
|Statement||Timothy J. Kehoe, David K. Levine|
|Series||WP -- Number 313, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 313.|
|Contributions||Levine, David K.|
|The Physical Object|
|Pagination||31 p. :|
|Number of Pages||31|
under indeterminacy, rather than a false ﬂnding to be excised through speciﬂcation search and parameter restrictions. JEL classiﬂcation: E31, E32, E42, E58 Keywords: Price puzzle, Indeterminacy, Great In°ation, Change-point, Metropolis-Hastings ⁄The authors thank Peter Ireland and an anonymous referee for very constructive comments. Determinacy and Indeterminacy of Equilibria Abstract This essay discusses work on the determinacy and indeterminacy of equilibrium in models of competitive markets. Determinacy typically refers to situations in which equilibria are ﬁnite in number, and local comparative statics can be precisely described. This essay describes basicFile Size: KB. Demographic Change and the Great Moderation in an Overlapping Generations Model with Matching Frictions Steven Lugauer University of Notre Dame Department of Economics Flanner Hall Notre Dame, IN () [email protected] September 7, I thank Daniele Coen-Pirani for many helpful suggestions and comments. The paper has also. This paper models an overlapping-generations economy that includes money and is populated with individuals of di⁄erent skills. They face a nonlinear income tax schedule and can engage in tax evasion. Money serves two purposes: the traditional one, modeled through a money-in-the-utility-function, and to facilitate tax evasion. It shows that.
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Kehoe & D. Levine, "Indeterminacy of Relative Prices in Overlapping Generations Models," Working papersMassachusetts Institute of Technology (MIT. Overlapping generations models born at time t consumes and has endowments at all time periods t +a,a = 0,1,2.
Let ca t and eat denote her consumption and endowment when her age is agent’s individual endowments only depend on her age, i.e. for all Indeterminacy of relative prices in overlapping generations models book = 0,1,2,ea t = ea.
At each period t, there exist spot markets for the consumption is one. Journal of Public Economics 42 () North-Holland THE ECONOMICS OF INDETERMINACY IN OVERLAPPING GENERATIONS MODELS Timothy J. KEHOE University of Minnesota, Minneapolis, MNUSA David K.
LEVINE* University of California, Los Angeles, CAUSA Received Novemberrevised version received November Recent research indicates that there are Cited by: Indeterminacy of Equilibrium in Stochastic Overlapping Generations Models the domain of possible prices; then if some indeterminacy is left, expectation functions are introduced to make the.
In this article, we propose a formal proof of the local determinacy of prices in a continuous-time, overlapping generations exchange economy. 1 It has been shown with models in discrete time that the equilibrium may be indeterminate and that the degree of indeterminacy may increase with the dimension of the model.
2 This is because the number Cited by: 3. Indeterminate equilibria are known to exist for overlapping generations models, though recent research has been limited to deterministic settings in which all equilibria converge to a steady state in the long run.
This paper analyzes stochastic overlapping generations models with three-period-lived representative consumers and adopts a novel computational algorithm to numerically approximate Cited by: 3.
Habit formation and indeterminacy in overlapping generations models Article in Economic Theory 55(1) January with 20 Reads How we measure 'reads'Author: Fabrizio Orrego. I introduce habit formation into an otherwise standard overlapping generations economy with pure exchange populated by three-period-lived agents.
Habits are modeled in such a way that current consumption increases the marginal utility of future consumption. With logarithmic utility functions, I demonstrate that habit formation gives rise to stable monetary steady states in economies with hump Cited by: 2.
"Indeterminacy of Relative Prices in Overlapping Generations Models," Working papersMassachusetts Institute of Technology (MIT), Department of Economics. Balasko, Yves & Shell, Karl, " The overlapping-generations model. Models of dynamic indeterminacy The indeterminacy agenda in macroeconomics has gone through two phases.
The initial phase, developed at the University of Pennsylvania in the United States and at CEPREMAP in France, consisted of dynamic models driven by. The overlapping generations (OLG) model is one of the dominating frameworks of analysis in the study of macroeconomic dynamics and economic contrast, to the Ramsey–Cass–Koopmans neoclassical growth model in which individuals are infinitely-lived, in the OLG model individuals live a finite length of time, long enough to overlap with at least one period of another agent's life.
This book is a competent textbook on the basics of General Equilibrium and Overlapping Generations models. It is adequate for graduate and undergraduate students of economics.
But is it simply put, boring and takes too much time and examples to teach GE by: Section 6 uses an overlapping generations model to place the two-period model in a dynamic setting. I show that the steady-state equilibria are determinate generically (echo-ing Kehoe and Levine's () study of the pure exchange case), thus demonstrating that constant relative prices preclude indeterminacy.
Also, we will see that the endowment. 1 Indeterminacy and suboptimality in a simple OLG model In this section we analyse the equilibrium set of a one-commodity per period, overlapping generations (OLG) economy, assuming that all agents meet simultaneously in all markets before time begins, just as in the Arrow–Debreu model.
Prices are all quoted in present value terms; that is, p File Size: KB. Chapter 4 The overlapping generations (OG) model The model Now we will brieﬂy discuss a macroeconomic model which has most of the important features of the RA model, but one - people die.
This small con-cession to reality will have a big impact on implications. Recall that the RA model had a few special characteristics: Size: KB. Numerical Simulation of the Overlapping Generations Models with Indeterminacy Zhigang Feng ISB, University of Zurich Novem Abstract In this paper we explore the computation and simulation of stochastic overlapping generation (OLG) models.
To do so we compute all Markovian equilibria adopting a recently developed numerical algorithm. preferences into a standard overlapping generations economy with pure exchange, and studied stability, indeterminacy and cycles with positive level of saving and non-negative public debt.
They showed that dynamics depend on the relative necessities of current and future consumption. In. Growth with Overlapping Generations In many situations, the assumption of a representative household is not appropriate because 1 households do not have an in–nite planning horizon 2 new households arrive (or are born) over time.
New economic interactions: decisions made by older ﬁgenerationsﬂ will a⁄ect the prices faced by younger. within inﬁnite horizon models and that from this point of view, Diamond meets Ramsey. Keywords: Indeterminacy, endogenous cycles, overlapping generations, endoge-nous labor supply, capital and labor externalities, under-accumulation.
Journal of Economic Literature Classiﬁcation Numbers: C62, Cited by: The Overlapping Generations (OLG) Model introduced by Allais (), Samuelson (), and Diamond () takes explicitly into account heterogeneity in \age", or more generally, heterogeneity in the position over the life-cycle.
This is a relevant dimension, as \old" and \young" consumer/workers clearly di er in their ability to supplyFile Size: 79KB. Overlapping Generations Model We have now covered the original Ramsey’s () model which used the concepts associated with the Calculus of Variations, and it variation using Optimal Control The-ory developed by Cass ().
These models are all variations of Neoclassical Growth Size: KB. A Solutions Manual for General Equilibrium, Overlapping Generations Models, and Optimal Growth Theory [Bewley, Truman F.] on *FREE* shipping on qualifying offers. A Solutions Manual for General Equilibrium, Overlapping Generations Models, and Optimal Growth Theory5/5(1).
Indeterminacy, in philosophy, can refer both to common scientific and mathematical concepts of uncertainty and their implications and to another kind of indeterminacy deriving from the nature of definition or meaning.
It is related to deconstructionism and to Nietzsche 's criticism of the Kantian noumenon. 1 Indeterminacy in philosophy. into€ a€ standard€ overlapping€ generations€ economy€ with€ pure€ exchange,€ and€ studied stability,€indeterminacy€and€cycles.€They€showed€that€dynamics€depend€on€the€relative necessities€of€current€and€future€consumption.€In€particular,€a€stable,€and€at€the€same.
The overlapping generations model is based in the seminal contributions of Allais (), Samuelson () and Diamond (). Setting Up the Model We start by presenting the notation to be used: • Agents work only in the ﬁrst period, receiving the wage w t; • c 1t designates consumption of the generation born in t in the ﬁrst File Size: KB.
Optimal Fiscal Policy in Overlapping Generations Models Carlos Garriga Federal Reserve Bank of St. Louis May 22nd, (First version: December ) Abstract In this paper, we explore the proposition that the optimal capital income tax is zero using an overlapping generations model.
We prove that for a large class of preferences, the optimal. (4a)[email protected]: 'CH=A>8 IH>@>HM u(c)= ln(c) 1 C 1t =(1+r t+1)⋅ β C 2t+1 t+1 β (1+r t+1)a t β a t 6B9 W t −a t =C 1t = a t /β a t = ⋅W t +β β 1 P [email protected]: CBGH6BH G6J>[email protected]>HM.
1 Indeterminacy and Suboptimality in aSimpleOLGModel In this section we analyze the equilibrium set of a one-commodity per period, overlap-ping generations (OLG) economy, assuming that all agents meet simultaneously in all markets before time begins, just as in the Arrow-Debreu model.
Prices are all. Chapter 4 Models of Overlapping Generations The representative household model is based on the assumption that all households are identical. An alternative class of models allows for households to differ. As young households are being born and old households die, there is a succession of overlapping generations.
At any given time, householdsFile Size: 1MB. Overlapping Generations Model with Endogenous Labor Supply: General Formulation1,2 C. NOURRY3 AND A. VENDITTI4 Communicated by C.
Deissenberg 1This paper is dedicated to the memory of Louis-Andr´e G´erard-Varet, Director of GREQAM from to 2We thank S. Catania, C. Deissenberg, J.-P. Drugeon, L.-A. G´erard-Varet, J.-M. Grandmont, Size: KB.
Page 3 of 5 Let’s define: x= age-specific interval a(x) = number of individuals surviving at start of interval x. Age a(x) 0 1 50 2 10 3 5 4 0 Follow cohort for 3 years, by year 4 all members are Size: 33KB. Introduction to the Overlapping Generation Model - Chapter 2.
Financial and General Equilibrium in Social Security - Chapter 3. Present Value Analysis of. Overlapping Generations Model. BIBLIOGRAPHY. Like other economic models, an overlapping generations model (or as it is widely known, an OLG model) is a simplified theoretical representation of complicated economic processes through a set of identities and equations that describe the behavior of various agents interacting with each other.
The indeterminacy claim for competitive price systems made by Sraffa () is examined by placing Sraffa's work in an intertemporal general equilibrium model. We show that indeterminacy occurs at a natural type of equilibrium. Moreover, the presence of linear activities instead of a differentiate technology is crucial and the indeterminacy is constructed, as in Sraffa, by fixing some or all.
Continuous-Time Overlapping Generations Models Hippolyte d’ALBIS∗ Toulouse School of Economics (LERNA) Emmanuelle AUGERAUD-VERON´ † LMA, University of La Rochelle June 3, Abstract Age structured populations are studied in economics through overlap-ping generations models.
These models allow for a realistic character. NBER Working Paper No. Issued in October NBER Program(s):Economic Fluctuations and Growth, International Trade and Investment. This paper contrasts the properties of dynamic Heckscher-Ohlin models with overlapping generations with those of models with infinitely lived consumers.
Indeterminacy of Relative Prices in Overlapping Generations Models Working papers, Massachusetts Institute of Technology (MIT), Department of Economics View citations (2) A General Equilibrium of Domestic Commerce in Mexico Working papers, Massachusetts Institute of Technology (MIT), Department of Economics; As usual in foreward looking models this determines Pt in terms of Pt+1 A stationary monetary equilibrium is a monetary equilibrium with (c1t,c2t) = (c1,c2), constant Econ (Lecture 13) Overlapping Generations Ma 8 / 16File Size: 98KB.
Models with Overlapping Generations Page 1 Introduction Most of the discussion in the section of the course on two-period economies focused on models where all agents are identical (representative agents models).
As we have seen in the section on open-economy models, allowing for heterogeneity across agents in that framework is relatively Size: KB. Demographics in Dynamic Heckscher-Ohlin Models: Overlapping Generations Versus Infinitely Lived Consumers Claustre Bajona and Timothy J.
Kehoe NBER Working Paper No. October JEL No. F11,F43,O15,O41 ABSTRACT This paper contrasts the properties of dynamic Heckscher-Ohlin models with overlapping generations.
Lecture 12 - Overlapping Generations Models of the Economy Overview. In order for Social Security to work, people have to believe there’s some possibility that the world will last forever, so that each old generation will have a young generation to support it.the Rendille age-group society.
Section 3 models the social rules. Section 4 develops the overlapping generations model and analytically describes the model’s dynamics. The model is calibrated in Section 5. Section 6 develops a simple voting analysis of the decision to abolish Sepaade. Section 7 concludes. 2. The Age-Group System of the RendilleFile Size: KB.Money The Overlapping Generations Model Money and the Overlapping Generations Model Joydeep Bhattacharya ISU Septem Money The Overlapping Generations Model Prices de–ne prices: it costs 20 cents to buy an apple.
Then p t = $1 5 is File Size: KB.