Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences

16 Pages Posted: 13 Jun 2006

See all articles by Erkki Koskela

Erkki Koskela

University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute); Bank of Finland - Research Department; IZA Institute of Labor Economics

Mikko Puhakka

University of Oulu - Department of Economics

Date Written: May 2006

Abstract

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

Koskela, Erkki and Puhakka, Mikko, Cycles and Indeterminacy in Overlapping Generations Economies with Stone-Geary Preferences (May 2006). CESifo Working Paper Series No. 1737. Available at SSRN: https://ssrn.com/abstract=908514

Erkki Koskela (Contact Author)

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland
+358 9 191 8894 (Phone)
+358 9 191 8877 (Fax)

HOME PAGE: http://www.cesifo.de/servlet/page?_pageid=56&_dad=portal30&_schema=PORTAL30&pa_id=7298

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Bank of Finland - Research Department ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Mikko Puhakka

University of Oulu - Department of Economics ( email )

PO Box 4600
FIN-90014 University of Oulu
Finland

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