An Overlapping Generations Model Core Equivalence Theorem

Abstract

The classical Debreu-Scarf core equivalence theorem asserts that in an exchange economy with a finite number of agents art allocation (under certain conditions) is a Walrasian equilibrium if and only if it belongs to the core of every replica of the exchange economy. The pioneering work of P. Samuelson has shown that such a result fails to be true in exchange economies with a countable number of agents. This paper presents a Debreu-Scarf type core equivalence theorem for the overlapping generations (OLG) model. Specifically, the notion of a short-term core allocation for the overlapping generations model is introduced and it is shown that (under some appropriate conditions) an OLG model allocation is a Walrasian equilibrium if and only if it belongs to the short-term core of every replica of the OLG economy.

Additional Information

We thank D. J. Brown and an anonymous referee for their constructive comments on an earlier version of this paper. Research of both authors was supported in part by a Chrysler Corporation grant to IUPUI. Published as Aliprantis, Charalambos D., and Owen Burkinshaw. "An overlapping generations model core equivalence theorem." Journal of economic theory 50, no. 2 (1990): 362-380.

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