We analyze an overlapping generations model where individuals’ well- being is negatively affected by the economy-wide average consumption level. Each individual aims at increasing his consumption level relatively to that of the others. We show that this “positional competition” can generate (local and global) indeterminacy and chaos.
Antoci, A., Naimzada, A., Sodini, M. (2010). Local and global indeterminacy in an overlapping generations model with consumption externalities. FAR EAST JOURNAL OF APPLIED MATHEMATICS.
Local and global indeterminacy in an overlapping generations model with consumption externalities
NAIMZADA, AHMAD KABIR;
2010
Abstract
We analyze an overlapping generations model where individuals’ well- being is negatively affected by the economy-wide average consumption level. Each individual aims at increasing his consumption level relatively to that of the others. We show that this “positional competition” can generate (local and global) indeterminacy and chaos.
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