Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences
16 Pages Posted: 13 Jun 2006
Date Written: May 2006
We investigate dynamics in an overlapping generations economy with Stone-Geary preferences. We show that a steady state exists, and furthermore and importantly, that there can be a multitude of two cycles even though intertemporal elasticity of substitution in consumption exceeds unity.
Keywords: Stone-Geary preferences, overlapping generations economy, cycles and indeterminacy
JEL Classification: E21, E32
Suggested Citation: Suggested Citation