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EXISTENCE AND UNIQUENESS OF STEADY-STATE EQUILIBRIUM IN A GENERALIZED OVERLAPPING GENERATIONS MODEL

Published online by Cambridge University Press:  09 June 2011

Jinlu Li  and
Shuanglin Lin
Jinlu Li*
Affiliation:
Shawnee State University
Shuanglin Lin
Affiliation:
Peking University and University of Nebraska at Omaha
*
Address correspondence to: Jinlu Li, Department of Mathematics, Shawnee State University, Portsmouth, OH 45662, USA; e-mail: [email protected].
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Abstract

Galor and Ryder [Journal of Economic Theory 49 (1989), 360–375] establish conditions for the existence of equilibrium in a Diamond-type overlapping-generations (OLG) model. Although theoretically appealing, these conditions are implicit and not convenient to apply. This paper provides explicit and easily applied conditions for the existence and uniqueness of steady-state equilibrium, with which one only needs to check the first derivatives of the production and utility functions and their interactions, with no need to solve the optimization problem. Our theorems on the existence and uniqueness of steady-state equilibrium can be applied to a larger class of OLG models that do not require second-order differentiability of the production and utility functions. We present examples to show how to check the existence and uniqueness of equilibrium.

Keywords

ExistenceUniquenessEquilibriumGeneralized Overlapping-Generations Model
Type
Articles
Information
Macroeconomic Dynamics , Volume 16 , Supplement S3 , November 2012 , pp. 299 - 311
Copyright
Copyright © Cambridge University Press 2011

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