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Equilibria in overlapping generations models
Bibliography: pages vi-viii.
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| Format: | Thesis |
| Language: | English |
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School of Economics
2016
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| _version_ | 1867613311049138176 |
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| access_status_str | Open Access |
| author | Mackensen, Heide C U |
| author2 | Abraham, Haim |
| author_browse | Abraham, Haim Mackensen, Heide C U |
| author_facet | Abraham, Haim Mackensen, Heide C U |
| author_sort | Mackensen, Heide C U |
| collection | Thesis |
| description | Bibliography: pages vi-viii. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/17347 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:34:06.076Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2016 |
| publishDateRange | 2016 |
| publishDateSort | 2016 |
| publisher | School of Economics |
| publisherStr | School of Economics |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/17347 Equilibria in overlapping generations models Mackensen, Heide C U Abraham, Haim Economics Bibliography: pages vi-viii. Interest rates are fundamental in the explanation of equilibrium prices over time, because they provide the link between the present and the future. Capturing this dynamic feature, the overlapping generations model is particularly suitable to address the interest rate problem, as has been shown by Paul Samuelson, David Gale and Costas Azariadis. This thesis reviews their contribution to the theory of interest: with his consumption-loan model, Samuelson sets the analytical framework for subsequent research. Furthermore, he demonstrates that the optimal interest rate is unstable, implying that a competitive economy may fail to approach the social optimum. The Samuelson and classical sets of assumptions are consolidated in the intertemporal exchange model of Gale. Its equilibrium nature, however, ignores the sequential adjustment of disequilibrium interest rates to their equilibrium values. Consequently it is difficult to comment on the direction of causality involved in the interest rate determination, unless a clearing house is introduced which simultaneously resolves the starting-up, continuity and causality problems. Departing from the full certainty scenario, Azariadis analyses the existence and likelihood of self-fulfilling prophecies. It is shown that the implications of the economy's assumed Markovian structure are twofold: while facilitating the parametric treatment of the transition probabilities, it negates the question concerning the likelihood of sunspot equilibria. Within the specified framework it is impossible to explain how the economy arrives at such equilibria; it is only possible to identify the conditions that maintain (once they exist) these self-fulfilling prophecies. 2016-02-29T12:03:03Z 2016-02-29T12:03:03Z 1992 Master Thesis Masters MCom http://hdl.handle.net/11427/17347 eng application/pdf School of Economics Faculty of Commerce University of Cape Town |
| spellingShingle | Economics Mackensen, Heide C U Equilibria in overlapping generations models |
| thesis_degree_str | Master's |
| title | Equilibria in overlapping generations models |
| title_full | Equilibria in overlapping generations models |
| title_fullStr | Equilibria in overlapping generations models |
| title_full_unstemmed | Equilibria in overlapping generations models |
| title_short | Equilibria in overlapping generations models |
| title_sort | equilibria in overlapping generations models |
| topic | Economics |
| url | http://hdl.handle.net/11427/17347 |
| work_keys_str_mv | AT mackensenheidecu equilibriainoverlappinggenerationsmodels |