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The overlapping generations (OLG) model is one of the dominating frameworks of analysis in the study of macroeconomic dynamics and economic growth.In contrast to the Ramsey–Cass–Koopmans neoclassical growth model in which individuals are infinitely-lived, in the OLG model individuals live a finite length of time, long enough to overlap with at least one period of another agent's life.
[note 1] Originally, Ramsey defined the model as a social planner's problem of maximizing consumption levels over successive generations. [4] Only later was a model adopted by Cass and Koopmans as a description of a decentralized dynamic economy with a representative agent.
Maurice Félix Charles Allais [2] (31 May 1911 – 9 October 2010) was a French physicist and economist, the 1988 winner of the Nobel Memorial Prize in Economic Sciences "for his pioneering contributions to the theory of markets and efficient utilization of resources", along with John Hicks (Value and Capital, 1939) and Paul Samuelson (The Foundations of Economic Analysis, 1947), to ...
The first actual model of sunspot equilibrium was produced by Shell in an OLG framework with linear utility functions, which appeared in his "Monnai et allocation intertemporelle" in 1977, as part of the Malinvaud lecture series in Paris (now published as a vintage paper in Macroeconomic Dynamics).
Note that this assumption is not necessary for the first fundamental theorem. Another instance in which the welfare theorems fail to hold is in the canonical Overlapping generations model (OLG). A further assumption that is implicit in the statement of the theorem is that the value of total endowments in the economy (some of which might be ...
Dynamic stochastic general equilibrium modeling (abbreviated as DSGE, or DGE, or sometimes SDGE) is a macroeconomic method which is often employed by monetary and fiscal authorities for policy analysis, explaining historical time-series data, as well as future forecasting purposes. [1]
A 2007 run on Northern Rock, a British bank. The Diamond–Dybvig model is an influential model of bank runs and related financial crises.The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any time) may give rise to self-fulfilling panics among depositors.
In monetary economics, the demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits rather than investments.It can refer to the demand for money narrowly defined as M1 (directly spendable holdings), or for money in the broader sense of M2 or M3.