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Pré-Publication, Document De Travail Année : 2011

Endogenous Business Cycles in OLG Economies with Multiple Consumption Goods

Résumé

We consider an OLG economy with two consumption goods. There are two sectors that produce a pure consumption good and a mixed good which can be either consumed or used as capital. We prove that the existence of Pareto optimal expectations-driven fluctuations is compatible with standard sectoral technologies if the share of the pure consumption good is low enough. Following Reichlin's (1986, Journal of Economic Theory, 40, 89-102) influential conclusion, this result suggests that some fiscal policy rules can prevent the existence of business-cycle fluctuations in the economy by driving it to the optimal steady state as soon as it is announced.
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Dates et versions

halshs-01059578 , version 1 (01-09-2014)

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  • HAL Id : halshs-01059578 , version 1

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Carine Nourry, Alain Venditti. Endogenous Business Cycles in OLG Economies with Multiple Consumption Goods. 2011. ⟨halshs-01059578⟩
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