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Frontiers of Economics in China

Front. Econ. China    2017, Vol. 12 Issue (2) : 268-279     DOI: 10.3868/s060-006-017-0012-3
Orginal Article |
Competitive Equilibrium in an Overlapping Generations Model with Production Loans
Dihai Wang1(), Gaowang Wang2(), Heng-fu Zou3()
1. School of Economics, Fudan University, Shanghai 200433, China
2. Center for Economic Research, Shandong University, Jinan 250100, China
3. China Economics and Management Academy, Central University of Finance and Economics, Beijing 100083, China
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Abstract

The paper shows that there do exist two kinds of steady states equilibria in the overlapping generations models with consumption and production loans, similar to the pure exchange economies examined by Gale (1973). Furthermore, the local stability properties of these two (kinds of) steady states are also investigated: In the classical case, the golden-rule steady state is stable and the balanced steady state is saddle-point stable; however, in the Samuelson case, the golden-rule steady state is saddle-point stable and the balanced steady state is stable.

Keywords multiple equilibria      overlapping generations model      production loans     
Issue Date: 17 July 2017
 Cite this article:   
Dihai Wang,Gaowang Wang,Heng-fu Zou. Competitive Equilibrium in an Overlapping Generations Model with Production Loans[J]. Front. Econ. China, 2017, 12(2): 268-279.
 URL:  
http://journal.hep.com.cn/fec/EN/10.3868/s060-006-017-0012-3
http://journal.hep.com.cn/fec/EN/Y2017/V12/I2/268
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