Existence and stability of overconsumption equilibria

Abstract : Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita and, thus, with individual consumption, whatever its level is. However, empirical evidence supports a U-shaped relationship between consumption and mortality, implying that the monotonicity of that relation is local but not global. This paper develops a two-period OLG model where life expectancy is a non-monotone function of consumption, and where agents form myopic anticipations about life expectancy. The existence, uniqueness and stability of steady-state equilibria are studied. It is shown that overconsumption equilibria -- i.e. equilibria at which consumption exceeds the level maximizing life expectancy -- exist in highly productive economies with a low impatience. We identify also conditions under which there exist long-run cycles in output and longevity around overconsumption equilibria.
Type de document :
Article dans une revue
Economic Modelling, Elsevier, 2011, 28 (1-2), pp.74-90. 〈10.1016/j.econmod.2010.09.022〉
Liste complète des métadonnées

https://hal-pjse.archives-ouvertes.fr/halshs-00754548
Contributeur : Caroline Bauer <>
Soumis le : mardi 20 novembre 2012 - 09:53:51
Dernière modification le : jeudi 11 janvier 2018 - 06:23:25

Identifiants

Collections

Citation

Grégory Ponthière. Existence and stability of overconsumption equilibria. Economic Modelling, Elsevier, 2011, 28 (1-2), pp.74-90. 〈10.1016/j.econmod.2010.09.022〉. 〈halshs-00754548〉

Partager

Métriques

Consultations de la notice

195