Local indeterminacy under dynamic efficiency two-sector overlapping generations economy - Inria - Institut national de recherche en sciences et technologies du numérique Accéder directement au contenu
Pré-Publication, Document De Travail Année : 2009

Local indeterminacy under dynamic efficiency two-sector overlapping generations economy

Résumé

We consider a two-sector two-periods overlapping generations model with inelastic labor, consumption in both periods of life and homothetic CES preferences. Assuming gross substitutability and a capital intensive consumption good, we prove that when dynamic efficiency holds, local indeterminacy and sunspot fluctuations occur with low enough values for the sectoral elasticities of capital-labor substitution and we illustrate this finding within a standard example. This result shows that some fiscal policy rules can prevent the existence of business-cycle fluctuations in the economy by driving it to the optimal steady state as soon as it is announced, and thus shows that Reichlin's [9] influential conclusion is a robust property in a two-sector OLG economy.
Fichier principal
Vignette du fichier
DT2009-27.pdf (259.46 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)
Loading...

Dates et versions

halshs-00432270 , version 1 (15-11-2009)

Identifiants

  • HAL Id : halshs-00432270 , version 1

Citer

Carine Nourry, Alain Venditti. Local indeterminacy under dynamic efficiency two-sector overlapping generations economy. 2009. ⟨halshs-00432270⟩
126 Consultations
170 Téléchargements

Partager

Gmail Facebook X LinkedIn More