Global Analysis of an Overlapping Generations Economy with Land

Macroeconomic Dynamics, Vol. 8, No. 05, pp. 582-595, November 2004

Posted: 7 Apr 2011

See all articles by Andrew Mountford

Andrew Mountford

Royal Holloway, University of London

Date Written: 2004

Abstract

This paper analyzes the global dynamics of a convex overlapping generations model with land. It derives a competitive equilibrium such that for every given initial level of capital per capita, the economy has a unique perfect-foresight equilibrium. It shows that the existence and uniqueness of this perfect-foresight equilibrium is robust to the presence of multiple steady-state levels of capital per capita. Furthermore, it shows that this model can provide an interesting insight into the economics of land taxation. Specifically, it shows that changes in the rate of land taxation may cause a bifurcation in the model s dynamical system and so may allow an economy with a low initial capital stock to break out of a poverty trap steady-state equilibrium.

Keywords: Land Reform, Economic Growth, Overlapping Generations

Suggested Citation

Mountford, Andrew, Global Analysis of an Overlapping Generations Economy with Land (2004). Macroeconomic Dynamics, Vol. 8, No. 05, pp. 582-595, November 2004, Available at SSRN: https://ssrn.com/abstract=1800607

Andrew Mountford (Contact Author)

Royal Holloway, University of London ( email )

Royal Holloway, University of London
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