Competitive Equilibrium in an Overlapping Generations Model with Production Loans
Dihai Wang , Gaowang Wang , Heng-fu Zou
Front. Econ. China ›› 2017, Vol. 12 ›› Issue (2) : 268 -279.
Competitive Equilibrium in an Overlapping Generations Model with Production Loans
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.
multiple equilibria / overlapping generations model / production loans
Higher Education Press
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