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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.
The announcement of the 2008 Nobel Memorial Prize in Economic Sciences in Stockholm. The winner of the prize was Paul Krugman.. The Nobel Memorial Prize in Economic Sciences, officially known as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an award funded by Sveriges Riksbank and ...
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
In the OLG model, the finiteness of endowments fails, giving rise to similar problems as described by Hilbert's paradox of the Grand Hotel. Whether the assumptions underlying the fundamental theorems are an adequate description of markets is at least partially an empirical question and may differ case by case.
Empirical estimates of the elasticity vary. Part of the difficulty stems from the fact that microeconomic studies come to different conclusions than macroeconomic studies, which use aggregate data. A meta-analysis of 169 published studies reports a mean elasticity of 0.5, but also substantial differences across countries.
The model became a central tool of macroeconomic teaching for many decades. Between the 1940s and mid-1970s, it was the leading framework of macroeconomic analysis. [ 5 ] It was particularly suited to illustrate the debate of the 1960s and 1970s between Keynesians and monetarists as to whether fiscal or monetary policy was most effective to ...
Truman Fassett Bewley (born July 19, 1941) is an American economist. He is the Alfred Cowles Professor of Economics at Yale University. [1] Originally specializing in mathematical economics and general equilibrium theory, since the late 1990s Bewley has gained renown for his work on sticky wages. [2]
According to Pesaran and Smith the macroeconometric model must have three basic characteristics viz. relevance, adequacy and consistency. [2] Relevance means the model must be according to the requirements of the desired output. Consistency will expect the model to be inline with the existing theory and inner working of the described system.