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Prelims

Stephen E. Spear (Carnegie Mellon University, USA)
Warren Young (Bar Ilan University, Israel)

Overlapping Generations: Methods, Models and Morphology

ISBN: 978-1-83753-053-3, eISBN: 978-1-83753-052-6

ISSN: 1571-0386

Publication date: 4 September 2023

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Citation

Spear, S.E. and Young, W. (2023), "Prelims", Overlapping Generations: Methods, Models and Morphology (International Symposia in Economic Theory and Econometrics, Vol. 32), Emerald Publishing Limited, Leeds, pp. i-xi. https://doi.org/10.1108/S1571-038620230000032029

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Emerald Publishing Limited

Copyright © 2023 Stephen E. Spear and Warren Young

Half Title Page

OVERLAPPING GENERATIONS

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INTERNATIONAL SYMPOSIA IN ECONOMIC THEORY AND ECONOMETRICS

Series Editor: William A. Barnett

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Title Page

INTERNATIONAL SYMPOSIA IN ECONOMIC THEORY AND ECONOMETRICS - VOLUME 32

OVERLAPPING GENERATIONS: METHODS, MODELS AND MORPHOLOGY

BY

STEPHEN E. SPEAR

Carnegie Mellon University, USA

and

WARREN YOUNG

Bar Ilan University, Israel

United Kingdom – North America – Japan – India – Malaysia – China

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Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2023

Copyright © 2023 Stephen E. Spear and Warren Young.

Published under exclusive licence by Emerald Publishing Limited.

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-83753-053-3 (Print)

ISBN: 978-1-83753-052-6 (Online)

ISBN: 978-1-83753-054-0 (Epub)

ISSN: 1571-0386 (Series)

Dedication Page

To our wives, Ann and Sara

Who put up with all the time that went into this work.

Contents

List of Figures and Tables ix
Acknowledgments xi
Introduction 1
Chapter 1: Origins of the Workhorse Models 11
Chapter 2: OLG – The Next Generations, 1960–1970 19
Chapter 3: Expectations and the Neutrality of Money c. 1972: From OLG to Stochastic OLG 43
Chapter 4: Infinite-lived Agents: Dynasty, 1970–1980 53
Chapter 5: OLG and Money, 1970–1980 61
Chapter 6: OLG and Theory, 1970–1980 79
Chapter 7: Boomers 99
Chapter 8: Gen X and Beyond: 1995–2015 159
Chapter 9: The Ascendance of ILA and the Future of Macro 183
Chapter 10: Morphology of OLG Models and Methods in Comparative Perspective 199
Chapter 11: Summary and Conclusion 209
Appendix 1: Graduate Textbook Coverage of OLG 213
Appendix 2: Rios-Rull Follow-on Citations 215
References 229
Index 241

List of Figures and Tables

Figures

Fig. 1. Standard Offer Curve Diagram for Two-period OLG 25
Fig. 2. Offer Curve With Population Growth 25
Fig. 3. Offer Curve With a Productive Asset 26
Fig. 4. Offer Curve Showing Competitive Equilibrium and Golden Rule 27
Fig. 5. Offer Curve for Inefficiency with Productive Asset 28
Fig. 6. Gale’s Offer Curve Analysis of Classical Case 38
Fig. 7. Gale’s Offer Curve Analysis for Samuelsonian Case 39
Fig. 8. Long-run Neutrality of Money 44
Fig. 9. Short-run Non-neutrality of Money 45
Fig. 10. Cass–Okuno–Zilcha Offer Curve Analysis 65
Fig. 11. Excess Demand Functions for Non-sunspot and Sunspot Equilibria 96
Fig. 12. Backward-bending Offer Curve and Cyclic Equilibrium 97
Fig. 13. Local Decomposition of Invariant Subspaces 101
Fig. 14. Graph of the Quadratic Logistic Map 110
Fig. 15. Time-series Simulation for Cyclic Equilibrium 111
Fig. 16. Time-series Simulation for Chaotic Equilibrium 111
Fig. 17. Benhabib–Day Analysis 112
Fig. 18. Grandmont Analysis 113
Fig. 19. Transversal Intersection 136
Fig. 20. Non-transversal Intersection 137
Fig. 21. Simulations From Henriksen–Spear (2012) 156
Fig. 22. Twentieth Century Birth Cohorts 176
Fig. 23. MY Ratio and Stock Price Correlation 177

Note: The colored versions of the graphics can be found online, either in the ebook version or on the last preprint in the Carnegie Mellon institutional archives.

Table

Table 1. Rios-Rull Citation Summary 146

Acknowledgments

We are grateful to all of the living protagonists in the OLG story we tell in this book, who took the time to converse with us by email in response to our various inquiries.

We are particularly indebted to Alan Auerbach and Larry Kotlikoff, who sat down with us for a Zoom meeting at the height of the Covid-19 pandemic for an interview, and to Phillippe Weil who did the same. Alan and Larry helped structure our thinking about how OLG theory met practice. Phillippe’s advice helped guided our treatment of the perpetual youth versions of the OLG model.

Finally, Karl Shell has been a mentor to us on this project from the very start. His knowledge of the OLG model – based on his own seminal research on it and from his contact with a great many of the formative papers on the model in his years as the (founding) editor of the Journal of Economic Theory – helped keep the project focused on the key elements of a research program in which there are many interesting, but tangential, threads.

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