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| HAL : halshs-00717158, version 1 |
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| Frequency of trade and the deterrminacy of equilibrium in economies of overlapping generations |
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| Hippolyte D'Albis 1, 2Emmanuelle Augeraud-Véron 3 |
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| (06/2012) |
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| In a recent article, Demichelis and Polemarchakis (2007) highlighted the role played by the frequency of trade on the degree of indeterminacy of equilibrium in economies of overlapping generations. Assuming that time has a finite starting point and extends into the infinite future, they prove that the degree of indeterminacy increases with the number of periods in the life-span of individuals, which is assumed to be certain. We show that this result does not hold when individual longevity is uncertain. We build a discrete time model that uniformly converges to a standard continuous time overlapping-generation model when the frequency of trade is infinite. Deriving the equilibrium prices, we demonstrate that the degree of indeterminacy is independent of the frequency of trade and is always equal to one. |
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| 1 : | Ecole d'Économie de Paris - Paris School of Economics (EEP-PSE) |
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Ecole d'Économie de Paris |
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| 2 : | Centre d'économie de la Sorbonne (CES) |
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CNRS : UMR8174 – Université Paris I - Panthéon-Sorbonne |
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| 3 : | Mathématiques, Image et Applications (MIA) |
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Université de La Rochelle : EA3165 |
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| Axe Macroéconomie |
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| Discipline | : | Sciences de l'Homme et Société/Economie et finances |
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| Overlapping generations – perpetual youth model – determinacy – continuous time – discrete time. |
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| Liste des fichiers attachés à ce document : | |||||
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| halshs-00717158, version 1 | |
| http://halshs.archives-ouvertes.fr/halshs-00717158 | |
| oai:halshs.archives-ouvertes.fr:halshs-00717158 | |
| Contributeur : Lucie Label | |
| Soumis le : Jeudi 12 Juillet 2012, 09:56:39 | |
| Dernière modification le : Jeudi 12 Juillet 2012, 11:50:23 | |
