Equilibria in an overlapping generations model with transfer policies and exogenous growth

For an overlapping generations economy with varying life-cycle productivity, non-stationary endowments, continuous time starting at <InlineEquation ID="IEq1"> <EquationSource Format="TEX">$$-\infty $$</EquationSource> </InlineEquation> (hence allowing for full anticipation), constant-returns-to-scale production and <Emphasis Type="SmallCaps">ces utility, we fully characterise equilibria where output is higher than investment, which is strictly positive. Net assets (aggregate savings minus the value of the capital stock) are constant in any equilibrium, and, for balanced growth equilibria (<Emphasis Type="SmallCaps">bge, defined for an economy with stationary endowments), net assets are non-zero only in the golden rule equilibrium, in accord with Gale (<CitationRef CitationID="CR14">1973</CitationRef>). The number of <Emphasis Type="SmallCaps">bge is finite. Their parity, however, depends on the life-cycle productivity, in particular, on the relation between the intertemporal elasticity of substitution, the minimal working age and the minimal tax age. Copyright Springer-Verlag Berlin Heidelberg 2013