Long gestation in an overlapping generations economy: Endogeneous cycles and indeterminacy of equilibria (Q5931985)

This paper deals in detail with some overlapping generations economies (in each period there are two age groups of agents, double infinity of agents and commodities, longer gestation of investments than investor's time horizon). After introducing a basic model and competitive equilibrium sequences the authors prove necessary conditions for such sequences and derive properties of the investment dynamics, which depend critically on the return of investments. As main theorem it is proved, that in all cases which come into consideration there exist endogenous business cycles. Some comments on the role of long gestations and cyclic movements in other models, things as nonlinear technologies, Hopf bifurcation, bubbles, wellfare aspects, close the paper.