Tax Changes and Phase Diagrams for an Overlapping Generations Model.

The literature evaluating tax changes within an intertemporal general equilibrium framework subdivides into representative agent and overlapping generations formulations. Papers in the former class have developed techniques analogous to those routine for static analyses. The author shows that the same general approach works for the overlapping generations model. The context is the system from Alan Auerbach and Laurence Kotlikoff's Dynamic Fiscal Policy (1987). The proposed methodology allows one to examine stability and determinancy issues for the model, deals precisely with small policy changes, and can easily handle bundles of changes. The author presents comparative static results for comparison with existing work. Copyright 1990 by University of Chicago Press.