Optimal Policy in OG Models

Christian Ghiglino, Mich Tvede

Publikation: Working paperForskning

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Abstrakt

In the present paper general stationary overlapping generations economies with many commodities in every period and many different consumers in every generation are considered. A government maximizes an utilitarian social welfare function, that is the sum of weighted averages of utilities for generations, through fiscal policy, i.e. monetary transfers and taxes. Both situations with and without time discounting are considered. It is shown that if the discount factor is suffciently close to one then the optimal policy stabilizes the economy, i.e. the equilibrium path has the turnpike property. Moreover the fiscal policy is shown to be time-consistent.
OriginalsprogEngelsk
Udgivelses stedKøbenhavn
UdgiverHandelshøjskolen i København
Antal sider25
StatusUdgivet - 1998
NavnWorking Paper / Department of Economics. Copenhagen Business School
Nummer8-1998

Emneord

  • Overlapping generations economie
  • Economic policy
  • Turnpike property
  • Discounting

Citationsformater

Ghiglino, C., & Tvede, M. (1998). Optimal Policy in OG Models. Handelshøjskolen i København. Working Paper / Department of Economics. Copenhagen Business School, Nr. 8-1998