Browsing by Subject "Overlapping generations model"

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Open Access
Energy saving technological progress in overlapping generations economies with renewable and non-renewable resources
(Bilgesel Yayıncılık San. ve Tic. Ltd., 2012) Fazlıoğlu, B. A.; Sağlam, H. Ç.
We study the effects of energy saving technological progress and substitution of renewable energy resources with non-renewable resources on natural resource depletion and long run growth. We develop a growth model in two-period overlapping generations framework incorporating the presence of both renewable and non-renewable energy resources and resource augmenting technological progress. We provide an analytical characterization of the balanced growth path and analyze the conditions for the economy to exhibit positive long run growth. Then, we investigate the effects of discount factor, resource augmenting technological progress and intensity of resources in energy production on the depletion rate. We also examine whether the long run growth is sustainable or optimal. Our main finding is that the effect of an increase in the intensity of the renewable resources in producing energy on long run growth is positive. In addition although exhaustible resources are essential in production the economy can be sustained and the balanced growth path is optimal.
Open Access
Essays on macroeconomics
(2015-09) Kantur, Zeynep
This dissertation consists of three essays on two topics in macroeconomics. The first essay focuses on the monetary policy implications in an aging society. The second and third essays revisit the famous Shimer puzzle in a theoretical and an empirical framework in a different perspective. The first essay shows the impact of aging on effectiveness of monetary policy. To do so, it introduces an OLG-DNK framework where the demand side is represented by a two period overlapping generations setup and the supply side of the economy follows a New Keynesian framework. The model enables the study of the interaction of monetary policy with demographics in a coherent general equilibrium model. The main finding is that this merger of two basic strands of the macroeconomics literature implies monetary policy should be expected to be less effective as societies age since the interest rate sensitivity of real economic activity declines as the population ages. The second essay studies the effect of employment-to-employment ows in a New Keynesian model with labor market frictions. Although New Keyne sian models with labor market frictions found an increase in unemployment and a decrease in labor market tightness in response to a positive technology shock (which appears to be in line with the recent empirical findings), the volatilities of these variables are not as high as their empirical counterparts. In that regard, we assume two types of firms which offer different wage levels, thereby incentivizing low-paid agents to search on-the-job. Differently from the literature, the main source of wage dispersion is the assumption of different bargaining powers of firms. The proposed model generates a higher volatility of unemployment and labor market tightness in response to a positive technology shock compared to the model without on-the-job search. Moreover, it is shown that bargaining power and on-the-job search intensity have an amplifying effect on the unemployment rate. Finally, the last essay is an empirical application of the theoretical model proposed in Chapter 3. This essay revisits the Shimer (2005) puzzle by covering a longer period, 1951-2014, than Shimer's exercise. Firstly, essay shows some stylized facts on U.S. labor market by using raw data and a structural VAR model. Then, the study tests the performance of the model utilized in Chapter 3. The structural VAR models shows that there is a positive correlation between productivity and unemployment and negative correlation between productivity and labor market tightness conditional to technology shock. In addition, I show that the model with on-the-job search component adds more amplification to the standard New Keynesian model with labor market frictions and it is capable of generating both the magnitude and the sign of the fluctuations of labor market variables to productivity shocks.
Open Access
Existence in an overlapping generations model with production
(1995) Abdulkadiroğlu, Atila
This thesis proves the existence of competitive equilibrium in an overlapping generations model (OLG) with production. In the proof, existence of equilibrium in the classical Arrow-Debreu Model is essential, and the work is similar in spirit to that-presented in Balasko, Cass and Shell [2], except some tricks used in the proof. The assumptions do not deviate from standard assumptions, so the model can be taken as a first step in developing more general models.
Open Access
Hopf bifurcation in an overlapping generations resource economy with endogenous population growth rate
(Walter de Gruyter, 2016) Fazlıoǧlu B.; Saǧlam, H.Ç.; Yüksel, M. K.
As scarce environmental resources necessarily put a constraint on population growth, we use more realistic population growth dynamics which contemplates a feedback mechanism between population growth rate and resource availability. We examine the local stability properties in overlapping generations resource economies which takes this feedback mechanism into account. The results indicate that Hopf bifurcation may arise without requiring logistic regeneration or unconventional constraints on parameter values. In particular, Hopf bifurcation is encountered under convex-concave dependence of carrying capacity on the resource availability. © 2016 Walter de Gruyter GmbH, Berlin/Boston.