Co-existence of a representative agent type equilibrium with a non-representative agent type equilibrium

A-Tier
Journal: Journal of Economic Theory
Year: 1992
Volume: 57
Issue: 1
Pages: 230-236

Authors (1)

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We provide an example of an overlapping generations model with bequest motives and a non-negativity constraint on bequests which has at least two equilibria. In one equilibrium the bequest motive is operative at all dates, and the equilibrium is formally equivalent to that of a representative infinitely lived agent model. In the other equilibrium the bequest motive is never operative, and the equilibrium is formally equivalent to that of an overlapping generations model without a bequest motive. The example has obvious implications for the Ricardian equivalence doctrine and the neutrality of (lump-sum) tax-transfers across generations.

Technical Details

RePEc Handle
repec:eee:jetheo:v:57:y:1992:i:1:p:230-236
Journal Field
Theory
Author Count
1
Added to Database
2026-01-24