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Time and Uncertainty in Overlapping Generations Economies

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  • Julio Dávila

Abstract

This paper shows the general reversibility of every perfect foresight equilibrium of an overlapping generations economy. It then shows and characterizes the existence of reversible sunspot equilibria in these economies as well, which seems to be at odds with our intuition about the irreversibility of a tree of events. Although the paper establishes also that such reversible stochastic equilibria constitute a negligible subset of all the equilibria of their class, their mere existence may be considered somewhat puzzling for this intuition. Journal of Economic Literature
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  • Julio Dávila, "undated". "Time and Uncertainty in Overlapping Generations Economies," Penn CARESS Working Papers f4274aafd97bb75e2364542f8, Penn Economics Department.
    • Handle: RePEc:cla:penntw:f4274aafd97bb75e2364542f8abbea0c
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    File URL: http://www.econ.upenn.edu/Centers/CARESS/CARESSpdf/00-09.pdf
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    References listed on IDEAS

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    1. Peck, James, 1988. "On the existence of sunspot equilibria in an overlapping generations model," Journal of Economic Theory, Elsevier, vol. 44(1), pages 19-42, February.
    2. Chiappori, Pierre-Andre & Geoffard, Pierre-Yves & Guesnerie, Roger, 1992. "Sunspot Fluctuations around a Steady State: The Case of Multidimensional, One-Step Forward Looking Economic Models," Econometrica, Econometric Society, vol. 60(5), pages 1097-1126, September.
    3. Julio Davila, 1994. "On sunspot equilibria in overlapping generations economies," Post-Print halshs-00286031, HAL.
    4. Julio Davila, 1997. "Sunspot Equilibria in Dynamics with Predetermined Variables," Post-Print halshs-00286029, HAL.
    5. Davila, J., 1997. "On the Connection Between Correlated Equilibria and Sunspot Equilibria," ASSET - Instituto De Economia Publica 159, ASSET (Association of Southern European Economic Theorists).
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    9. Julio Dávila, "undated". "Reducing Overlapping Generations Economies to Finite Economies," Penn CARESS Working Papers 9819996a2b80f99a81bf1509c, Penn Economics Department.
    10. Chiappori, Pierre Andre & Guesnerie, Roger, 1991. "Sunspot equilibria in sequential markets models," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 32, pages 1683-1762, Elsevier.
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    16. Barnett,William A. & Geweke,John & Shell,Karl (ed.), 1989. "Economic Complexity: Chaos, Sunspots, Bubbles, and Nonlinearity," Cambridge Books, Cambridge University Press, number 9780521355636, September.
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