On the long-run fluctuations of inheritance in two-sector OLG models - Archive ouverte HAL Access content directly
Journal Articles Journal of Mathematical Economics Year : 2022

On the long-run fluctuations of inheritance in two-sector OLG models

(1) , (2, 1)
1
2

Abstract

This paper provides a long-run cycle perspective to explain the behavior of the annual flow of inheritance. Based on the low- and medium frequency properties of long time bequests series in Sweden, France, UK, and Germany, we explore the extent to which a two-sector Barro-type OLG model is consistent with such empirical regularities. As long as agents are sufficiently impatient and preferences are non-separable, we show that endogenous fluctuations are likely to occur through two mechanisms, which can generate independently or together either period-2 cycles or Hopf bifurcations. The first mechanism relies on the elasticity of intertemporal substitution or equivalently the sign of the cross-derivative of the utility function whereas the second rests on sectoral technologies through the sign of the capital intensity difference across two sectors. Furthermore, building on the quasi-palindromic nature of the degree-4 characteristic equation, we derive some meaningful sufficient conditions associated to the occurrence of complex roots and a Hopf bifurcation in a two-sector OLG model.
Embargoed file
Embargoed file
0 1 11
Year Month Jours
Avant la publication

Dates and versions

hal-03869121 , version 1 (28-11-2022)

Identifiers

Cite

Florian Pelgrin, Alain Venditti. On the long-run fluctuations of inheritance in two-sector OLG models. Journal of Mathematical Economics, 2022, 101, pp.102670. ⟨10.1016/j.jmateco.2022.102670⟩. ⟨hal-03869121⟩
0 View
0 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More