Equilibrium price dynamics in an overlapping-generations exchange economy |
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| Authors: | Paulo Brito,Rui Dilã o |
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| Affiliation: | 1. Research Unit on Complexity and Economics (UECE), Instituto Superior de Economia e Gestão, Technical University of Lisbon, R. Miguel Lupi 20, 1249-078 Lisbon, Portugal;2. Nonlinear Dynamics Group, Instituto Superior Técnico, Technical University of Lisbon, Av. Rovisco Pais, 1049-001 Lisbon, Portugal |
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| Abstract: | An extension to the Yaari (1965)–Blanchard (1985) continuous time overlapping generations model for an endowment Arrow–Debreu economy with an age-structured population is presented. It is proved that Arrow–Debreu equilibrium prices are represented by a double linear integral equation, and depend on the age-distributions of population and endowments. For an economy with a balanced growth, and logarithmic utility, we prove that bubbles may exist if endowments are distributed earlier than some critical age. |
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| Keywords: | D51 G12 J0 |
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