Chaotic dynamics in an overlapping generations model with myopic and adaptive expectations

Chen, Hung‐Ju; Li, Ming‐Chia; Lin, Yung-Ju

doi:10.1016/j.jebo.2007.03.005

Cited by 17 publications

(8 citation statements)

References 16 publications

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“…In fact, the literature has definitely shown, by resorting to various mathematical tools, that the Diamond's model with rational individuals (perfect foresight) can never possess an unstable equilibrium, and thus business cycle is prevented in that case (Galor and Ryder, 1989;Longo and Valori, 2001;Wendner, 2003;Chen et al, 2008).…”

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confidence: 99%

Public health spending, old-age productivity and economic growth: Chaotic cycles under perfect foresight

Fanti

Gori

2011

Journal of Economic Behavior & Organization

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This paper analyses the dynamics of a double Cobb-Douglas economy with overlapping generations and public health investments that affect the supply of efficient labour of the old-aged. It is shown that the positive steady state of the economy is unique. Moreover, we provide necessary and sufficient conditions for the emergence of endogenous deterministic complex cycles when individuals are perfect foresighted. Interestingly, the equilibrium dynamics shows rather complicated phenomena such as a multiplicity of period-bubbling.

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confidence: 99%

Public health spending, old-age productivity and economic growth: Chaotic cycles under perfect foresight

Fanti

Gori

2011

Journal of Economic Behavior & Organization

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“…These are bequeathed tastes for the individual born at time t representing a reference where comparing current consumption. The expected lifetime utility function of generation t is of the CIES type (de la Croix and Michel, 2002;Chen et al, 2008;Fanti and Spataro, 2008;Fanti and Gori, 2013), that is:…”

Section: The Economymentioning

confidence: 99%

A model of growth with inherited tastes

Fanti

Gori

Mammana

et al. 2018

Decisions Econ Finan

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This research aims at studying a general equilibrium closed economy with overlapping generations and inherited tastes (aspirations), as in de la Croix (1996). It shows that the interaction between the intensity of aspirations and the elasticity of substitution of effective consumption affects the qualitative and quantitative long-term dynamics from both local and global perspectives. The related literature is extended by showing that 1) the Neimark-Sacker bifurcation found by de la Croix (1996) does not necessarily give rise to fluctuations 2) endogenous (long lasting) fluctuations occur through the emergence of period-doubling bifurcations.

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“…Some recent examples include: Chen et al (2008), who apply di¤erent types of expectations (perfect foresight, myopic expectations and adaptive expectations) to an overlapping generations model; they conclude that dynamics are simple under perfect foresight, but myopic and adaptive expectations may induce cycles and chaotic motion. In Fanti and Manfredi (2007), a standard neoclassical labor market is studied; in this case, cycles and chaos are the result of a setting where consumption and leisure are considered su¢ ciently low substitutes.…”

Section: Making Sense Of Theoretical Nonlineari-tiesmentioning

confidence: 99%

On the Concept of Endogenous Volatility

Gomes¹

2014

New Economic Windows

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Most …nancial and economic time-series display a strong volatility around their trends.The di¢ culty in explaining this volatility has led economists to interpret it as exogenous, i.e., as the result of forces that lie outside the scope of the assumed economic relations.Consequently, it becomes hard or impossible to formulate short-run forecasts on asset prices or on values of macroeconomic variables. However, many random looking economic and …nancial series may, in fact, be subject to deterministic irregular behavior, which can be measured and modelled. We address the notion of endogenous volatility and exemplify the concept with a simple business-cycles model.

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Chaotic dynamics in an overlapping generations model with myopic and adaptive expectations

Cited by 17 publications

References 16 publications

Public health spending, old-age productivity and economic growth: Chaotic cycles under perfect foresight

Public health spending, old-age productivity and economic growth: Chaotic cycles under perfect foresight

A model of growth with inherited tastes

On the Concept of Endogenous Volatility

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