Equilibrium price dynamics in an overlapping-generations exchange economy
We present a continuous time overlapping generations model for an endowment Arrow-Debreu economy with an age-structured population. For an economy with a balanced growth path, we prove that Arrow-Debreu equilibrium prices exist, and their dynamic properties are age-dependent. Our model allows for an...
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| Format: | workingPaper |
| Language: | eng |
| Published: |
2010
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| Online Access: | http://hdl.handle.net/10400.5/2651 |
| Country: | Portugal |
| Oai: | oai:www.repository.utl.pt:10400.5/2651 |
| Summary: | We present a continuous time overlapping generations model for an endowment Arrow-Debreu economy with an age-structured population. For an economy with a balanced growth path, we prove that Arrow-Debreu equilibrium prices exist, and their dynamic properties are age-dependent. Our model allows for an explicit dependence of prices on critical age-specific endowment parameters. We show that, if endowments are distributed earlier than some critical age, then speculative bubbles for prices do exist. |
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