Nonmonetary steady states in stationary overlapping generations models with long lived agents and discounting: Multiplicity, optimality, and consumption smoothing (Q1110427)

This paper studies a sequence of overlapping generation models indexed by the length of the life of each generation. A stationary pure exchange environment with no uncertainty is considered, although some potential extensions are briefly discussed. Given certain utility and endowment patterns, one obtains various results of the type, (i) every sequence of equilibrium interest rates converges to the discount rate; (ii) consumption for any agent at any fixed age converges to her/his permanent income evaluated using the utility discount rate and so on.