Dynamic Efficiency in a Two-Sector Overlapping Generations Model

This paper looks at the conditions under which we may have welfare improving capital accumulation in two-sector two-period overlapping generations models. It is found that both the usual conditions of the rate of interest exceeding the population growth rate and profits exceeding investment may give misleading answers. Finally, there is also the possibility of asset bubbles, even with dynamic efficiency.

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Year of publication:	1997-10
Authors:	Sen, Partha
Institutions:	Centre for Research into Industry, Enterprise, Finance and the Firm (CRIEFF), University of St. Andrews
Subject:	Overacumulation \| overlapping generations \| dynamic efficiency \| asset bubbles

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Series:	CRIEFF Discussion Papers.
Type of publication:	Book / Working Paper
Classification:	D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; E44 - Financial Markets and the Macroeconomy ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005696987