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Quasi-Periodic Motions in a Polarized Overlapping Generations Model with Technology Choice

Author

Listed:
  • Takao Asano

    (Okayama University)

  • Akihisa Shibata

    (Kyoto University)

  • Masanori Yokoo

    (Okayama University)

Abstract

This paper constructs a simple overlapping generations (OLG) model with the working and capitalist classes and two types of production technologies. The behavior of agents belonging to the working class is basically the same as that in the standard Diamond (1965) type OLG model, whereas agents belonging to the capitalist class face two available technologies, select the one with a higher return on capital, and bequeath their assets to the next generation without supplying labor. Using techniques concerning the circle map in dynamical systems theory, we show that in an extreme case in which one technology is linear and the other is of the Leontief type, the economy exhibits bounded, non-periodic but non-chaotic motions for a large set of parameter values. We provide explicit formulas for the rotation number and the absolutely continuous invariant probability measure of our model.

Suggested Citation

  • Takao Asano & Akihisa Shibata & Masanori Yokoo, 2021. "Quasi-Periodic Motions in a Polarized Overlapping Generations Model with Technology Choice," KIER Working Papers 1070, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1070
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    Cited by:

    1. Takao Asano & Akihisa Shibata & Masanori Yokoo, 2024. "Technology choice, externalities in production, and a chaotic middle-income trap," Journal of Economics, Springer, vol. 141(1), pages 29-56, January.

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    Keywords

    Endogenous business cycles; technology choice; quasi-periodic motion; OLG model; rotation numbe;
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