# Stationary Markov equilibria for overlapping generations

Kübler, Felix; Polemarchakis, Herakles (2004). Stationary Markov equilibria for overlapping generations. Economic Theory, 24(3):623-643.

## Abstract

At a stationary Markov equilibrium of a Markovian economy of overlapping generations, prices at a date-event are determined by the realization of the shock, the distribution of wealth and, with production, the stock of capital. Stationary Markov equilibria may not exist; this is the case with intra-generational heterogeneity and multiple commodities or long life spans. Generalized Markov equilibria exist if prices are allowed to vary also with the realization of the shock, prices and the allocation of consumption and production at the predecessor date-event. (Stationary) Markov $\epsilon$ -equilibria always exist; as $\epsilon \rightarrow 0,$ allocations and prices converge to equilibrium prices and allocations that, however, need not be stationary.

## Abstract

At a stationary Markov equilibrium of a Markovian economy of overlapping generations, prices at a date-event are determined by the realization of the shock, the distribution of wealth and, with production, the stock of capital. Stationary Markov equilibria may not exist; this is the case with intra-generational heterogeneity and multiple commodities or long life spans. Generalized Markov equilibria exist if prices are allowed to vary also with the realization of the shock, prices and the allocation of consumption and production at the predecessor date-event. (Stationary) Markov $\epsilon$ -equilibria always exist; as $\epsilon \rightarrow 0,$ allocations and prices converge to equilibrium prices and allocations that, however, need not be stationary.

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23 citations in Web of Science®
24 citations in Scopus®

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Item Type: Journal Article, refereed, original work 03 Faculty of Economics > Department of Banking and Finance 330 Economics English 2004 10 Aug 2012 12:21 24 Apr 2016 07:15 Springer 20 0938-2259 https://doi.org/10.1007/s00199-004-0523-3 merlin-id:6949