Stone–Geary preferences in overlapping generations economies under pure exchange: A note |
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Authors: | Erkki Koskela Mikko Puhakka |
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Institution: | aDepartment of Economics, University of Helsinki, P.O. Box 17, FIN-00014 Helsinki, Finland;bDepartment of Economics, University of Oulu, P.O. Box 4600, FIN-90014 Oulu, Finland |
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Abstract: | We incorporate Stone–Geary preferences into an overlapping generations economy under pure exchange, and explore stability, indeterminacy, and cycles with positive levels of saving and nonnegative public debt. A stable nontrivial steady state exists for parameter values, for which there does not exist equilibrium in the model with purely logarithmic utility function. We also show the possibility of a period-doubling bifurcation (a two-cycle). |
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Keywords: | Stone– Geary preferences Overlapping generations economy Two-cycles |
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