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Business Cycle Phenomena in Overlapping Generations Economies with Stochastic Production


Peter, Jens-Ulrich; Schenk-Hoppé, Klaus Reiner (1999). Business Cycle Phenomena in Overlapping Generations Economies with Stochastic Production. Working paper series / Institute for Empirical Research in Economics No. 30, University of Zurich.

Abstract

This paper analyzes economic fluctuations in an overlapping generations economy with productive capital in which random shocks in aggregate productivity are present. Under specific assumptions we obtain an explicit solution of the model. Applying random dynamical systems theory, we can prove that the long-run behavior of the economy is uniquely described by an asymptotically stable random fixed point. The statistical properties of the aggregates output, consumption, capital stock, and real wage are investigated numerically. We find that our artificial economy displays several real world business cycle phenomena.nn

Abstract

This paper analyzes economic fluctuations in an overlapping generations economy with productive capital in which random shocks in aggregate productivity are present. Under specific assumptions we obtain an explicit solution of the model. Applying random dynamical systems theory, we can prove that the long-run behavior of the economy is uniquely described by an asymptotically stable random fixed point. The statistical properties of the aggregates output, consumption, capital stock, and real wage are investigated numerically. We find that our artificial economy displays several real world business cycle phenomena.nn

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:December 1999
Deposited On:29 Nov 2011 19:45
Last Modified:12 Aug 2017 12:45
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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