On overlapping generations models with productive capital (Q1815567)

The chapters of the book and their contents are as follows: 1) Dynamic efficiency in a generalized Diamond-type overlapping generations model. An analysis is presented of dynamic efficiency in a modified Diamond-type overlapping generations model providing a both necessary and sufficient condition for Pareto-inefficiency of arbitrary equilibrium paths. Moreover, some necessary and sufficient conditions for Pareto-inefficiency were developed using price information and, for the sufficient conditions, by imposing some restrictions on individual preferences. It is also demonstrated that Pareto-efficiency states of the economy can always be attained starting at a inefficient allocation. 2) Asset bubbles, pay-as-you-go system and dynamic efficiency. Fundamental questions are addressed as: what must be the internal rate of interest of such a system to guarantee that an individual is not made worse-off compared to the laissez-faire equilibrium, or can an individual be held indifferent compared to this equilibrium if it earns the same interest rate on its contributions as the real interest rate? 3) Just resource sharing among generations: equity, efficiency and optimal population. The approach of Phelps and Riley on the maximum allocation to a more general Diamond-type overlapping generations model with population growth is extended and production technologies which do not automatically generate a Golden Rule are considered. 4) Anticipation and the time-consistency of fiscal policy. This section is devoted to the problem of finding a time-consistent fiscal policy in the framework of an overlapping generations economy. In each period there is a new government which tries to maximize a utilitarian welfare function, taking into account the utility of only those individuals who are alive in that period. A model where governments play the role of agents who must try to anticipate the behaviour of their successors and choose their own strategy accordingly. The individuals, belonging to a sequence of egoistic overlapping generations, thereby play only a passive role.