Competitive business cycles in an overlapping generations economy with productive investment (Q1106712)

This paper examines the emergence of long-run competitive periodic equilibria in a two-period overlapping generations model with capital accumulation. The existence of periodic equilibria is a consequence of the existence of an aggregate bubble (money) and of a ``nonlinear'' behaviour of aggregate savings. The technique used is to show that the problem can be reduced to the study of a dynamical map from an interval into itself, although it is originally two dimensional. This will allow us to study the occurrence of cycles from a global point of view.