On efficiency and local uniqueness in two-sector OLG economies

Jean-Pierre Drugeon (1) , Carine Nourry (2) , Alain Venditti (2)

1 CES - Centre d'économie de la Sorbonne
2 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille

We consider a two-sector overlapping generations model with homothetic preferences. Under standard conditions on technologies, upon large enough values for the share of first period consumption over the wage income, we prove that dynamic efficiency and local uniqueness of the competitive equilibrium hold. On the contrary, for lower values of the share of first period consumption over the wage income which imply dynamic inefficiency of the steady state, local indeterminacy arises without requiring strong restrictions on the sectoral elasticities of capital-labor substitution.

Mots clés: Two-sector OLG model; efficiency; local uniqueness

Domaines: Economies et finances

Jean-Pierre Drugeon, Carine Nourry, Alain Venditti. On efficiency and local uniqueness in two-sector OLG economies. 2009. ⟨halshs-00439241⟩