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Local Determinacy of Prices in an Overlapping Generations Model with Continuous Trading

d'Albis, Hippolyte and Augeraud-Véron, Emmanuelle and Hupkes, Herman Jan (2014): Local Determinacy of Prices in an Overlapping Generations Model with Continuous Trading.

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Abstract

We characterize the determinacy properties of the intertemporal equilibrium for a continuous-time, pure-exchange, overlapping generations economy with logarithmic preferences. Using recent advances in the theory of functional differential equations, we show that the equilibrium is locally unique and that prices converge to a balanced growth path and are determined.

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