Time and Uncertainty in Overlapping Generations Economies
Posted: 15 Oct 2001
Abstract
This paper shows the general reversibility of every perfect foresight equilibrium of an overlapping generations economy. It then shows and characterizes the existence of reversible sunspot equilibria in these economies as well, which seems to be at odds with our intuition about the irreversibility of a tree of events. Although the paper establishes also that such reversible stochastic equilibria constitute a negligible subset of all the equilibria of their class, their mere existence may be considered somewhat puzzling for this intuition.
Keywords: Overlapping generations, sunspots, time reversibility
JEL Classification: D50, D80, D90
Suggested Citation: Suggested Citation
Davila, Julio, Time and Uncertainty in Overlapping Generations Economies. Available at SSRN: https://ssrn.com/abstract=275173
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