IDEAS home Printed from https://ideas.repec.org/a/eee/dyncon/v37y2013i11p2168-2179.html
   My bibliography  Save this article

A family production overlapping generations economy

Author

Listed:
  • Cellarier, Laurent L.

Abstract

This paper provides a theoretical analysis of an overlapping generations economy in which production decisions and input–output allocations are all carried out at the family level. I consider a single class of output allocation schemes and various degrees of knowledge about the production technology. Under complete knowledge, I show that a family organizational structure in which everyone receives his marginal contribution to output, invests less in physical capital than under a perfectly competitive equilibrium environment. Under incomplete knowledge, I analyze and compare how beliefs about the input–output relationship affect the physical capital accumulation dynamics and the long-run standards of living.

Suggested Citation

  • Cellarier, Laurent L., 2013. "A family production overlapping generations economy," Journal of Economic Dynamics and Control, Elsevier, vol. 37(11), pages 2168-2179.
    • Handle: RePEc:eee:dyncon:v:37:y:2013:i:11:p:2168-2179
    DOI: 10.1016/j.jedc.2013.05.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165188913001152
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jedc.2013.05.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Greenwood, Jeremy & Hercowitz, Zvi, 1991. "The Allocation of Capital and Time over the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1188-1214, December.
    2. Galor, Oded & Ryder, Harl E., 1989. "Existence, uniqueness, and stability of equilibrium in an overlapping-generations model with productive capital," Journal of Economic Theory, Elsevier, vol. 49(2), pages 360-375, December.
    3. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66(6), pages 467-467.
    4. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
    5. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September.
    6. Van Zandt, Timothy & Lettau, Martin, 2003. "Robustness Of Adaptive Expectations As An Equilibrium Selection Device," Macroeconomic Dynamics, Cambridge University Press, vol. 7(1), pages 89-118, February.
    7. Francesco Caselli & Nicola Gennaioli, 2013. "Dynastic Management," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 971-996, January.
    8. Jean-Michel Grandmont, 1998. "Expectations Formation and Stability of Large Socioeconomic Systems," Econometrica, Econometric Society, vol. 66(4), pages 741-782, July.
    9. Tuinstra, Jan, 2003. "Beliefs equilibria in an overlapping generations model," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 145-164, February.
    10. Laurence J. Kotlikoff & Robert W. Rosenthal, 1993. "Some Inefficiency Implications Of Generational Politics And Exchange," Economics and Politics, Wiley Blackwell, vol. 5(1), pages 27-42, March.
    11. Grandmont, Jean-Michel & Laroque, Guy, 1986. "Stability of cycles and expectations," Journal of Economic Theory, Elsevier, vol. 40(1), pages 138-151, October.
    12. Herbert Dawid, 2005. "Long horizon versus short horizon planning in dynamic optimization problems with incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(3), pages 575-597, April.
    13. Barnett,William A. & Cornet,Bernard & D'Aspremont,Claude & Gabszewicz,Jean & Mas-Colell,Andreu (ed.), 1991. "Equilibrium Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521392198, January.
    14. Benassy, Jean-Pascal & Blad, Michael C., 1989. "On learning and rational expectations in an overlapping generations model," Journal of Economic Dynamics and Control, Elsevier, vol. 13(3), pages 379-400, July.
    15. Bullard James, 1994. "Learning Equilibria," Journal of Economic Theory, Elsevier, vol. 64(2), pages 468-485, December.
    16. Ed Nosal & Richard Rogerson & Randall Wright, 1992. "The Role of Household Production in Models of Involuntary Unemployment and Underemployment," Canadian Journal of Economics, Canadian Economics Association, vol. 25(3), pages 507-520, August.
    17. Shell, Karl, 1971. "Notes on the Economics of Infinity," Journal of Political Economy, University of Chicago Press, vol. 79(5), pages 1002-1011, Sept.-Oct.
    18. Böhm, Volker & Wenzelburger, Jan, 1999. "Expectations, Forecasting, And Perfect Foresight," Macroeconomic Dynamics, Cambridge University Press, vol. 3(2), pages 167-186, June.
    19. Fisher, Jonas D. M., 1997. "Relative prices, complementarities and comovement among components of aggregate expenditures," Journal of Monetary Economics, Elsevier, vol. 39(3), pages 449-474, August.
    20. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    21. Rios-Rull, Jose-Victor, 1993. "Working in the Market, Working at Home, and the Acquisition of Skills: A General-Equilibrium Approach," American Economic Review, American Economic Association, vol. 83(4), pages 893-907, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cellarier, Laurent L., 2021. "Is landownership a ladder out of poverty?," World Development, Elsevier, vol. 146(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cavalli, F. & Chen, H.-J. & Li, M.-C. & Naimzada, A. & Pecora, N., 2023. "Heterogeneous expectations and equilibria selection in an evolutionary overlapping generations model," Journal of Mathematical Economics, Elsevier, vol. 104(C).
    2. Jean-Michel Grandmont, 1998. "Expectations Formation and Stability of Large Socioeconomic Systems," Econometrica, Econometric Society, vol. 66(4), pages 741-782, July.
    3. Honkapohja, Seppo & Mitra, Kaushik, 2003. "Learning with bounded memory in stochastic models," Journal of Economic Dynamics and Control, Elsevier, vol. 27(8), pages 1437-1457, June.
    4. Mark Pingle & Leigh Tesfatsion, 1993. "``Active Intermediation in a Monetary Overlapping Generations Economy''," Macroeconomics 9312001, University Library of Munich, Germany, revised 04 Dec 1993.
    5. Brock, William A. & de Fontnouvelle, Patrick, 2000. "Expectational diversity in monetary economies," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 725-759, June.
    6. Cellarier, Laurent L., 2008. "Least squares learning and business cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 553-564, December.
    7. Shurojit Chatterji & Ignacio N. Lobato, 2010. "Transformations of the state variable and learning dynamics," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(4), pages 385-403, December.
    8. Michael Assous & Pedro Garcia Duarte, 2017. "Challenging Lucas: from overlapping generations to infinite-lived agent models," Working Papers, Department of Economics 2017_03, University of São Paulo (FEA-USP).
    9. Cars Hommes, 2017. "From Self-Fulfilling Mistakes to Behavioral Learning Equilibria," Studies in Economic Theory, in: Kazuo Nishimura & Alain Venditti & Nicholas C. Yannelis (ed.), Sunspots and Non-Linear Dynamics, chapter 0, pages 97-123, Springer.
    10. Brock, W.A. & Dindo, P.D.E. & Hommes, C.H., 2005. "Adaptive Rational Equilibrium with Forward Looking Agents, fortcoming in International Journal of Economic Theory (IJET) 2006, special issue in honor of Jean-Michel Grandmont," CeNDEF Working Papers 05-15, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    11. Goeree, Jacob K. & Hommes, Cars H., 2000. "Heterogeneous beliefs and the non-linear cobweb model," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 761-798, June.
    12. Wilfredo Leiva, 1999. "Adaptive learning in models with lagged variables," Economics Working Papers 413, Department of Economics and Business, Universitat Pompeu Fabra.
    13. Philippe Michel & Alain Venditti & Claude Jessua, 1996. "Croissance optimale et cycles dans le modèle à générations imbriquées : un exemple," Revue Économique, Programme National Persée, vol. 47(3), pages 487-497.
    14. Simonovits, András, 1999. "A racionális és a naiv várakozások stabilitásának összehasonlítása [Commparison of the stability of rational and naive expectations]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 689-700.
    15. Branch, William A. & McGough, Bruce, 2005. "Consistent expectations and misspecification in stochastic non-linear economies," Journal of Economic Dynamics and Control, Elsevier, vol. 29(4), pages 659-676, April.
    16. Philippe Weil, 2008. "Overlapping Generations: The First Jubilee," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 115-134, Fall.
    17. Roger E.A. Farmer, 2019. "The Indeterminacy School in Macroeconomics," NBER Working Papers 25879, National Bureau of Economic Research, Inc.
    18. Etro, Federico, 2017. "Research in economics and macroeconomics," Research in Economics, Elsevier, vol. 71(3), pages 373-383.
    19. Chen, Hung-Ju & Li, Ming-Chia, 2008. "Productive public expenditures, expectation formations and nonlinear dynamics," Mathematical Social Sciences, Elsevier, vol. 56(1), pages 109-126, July.
    20. Orlando Gomes, 2010. "Ordinary Least Squares Learning And Nonlinearities In Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 24(1), pages 52-84, February.

    More about this item

    Keywords

    Overlapping generations; Family production; Expectation function;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:37:y:2013:i:11:p:2168-2179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jedc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.