An Obtrusive Remark on Capital and Comparative Statics
Bloise, Gaetano and Reichlin, Pietro (2006) An Obtrusive Remark on Capital and Comparative Statics. [Working Paper]. p. 20.
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We present a simple comparative statics analysis of steady-state equilibria in overlapping generations economies with capital accumulation. We regard comparative statics as paradoxical whenever an exogenous increase in saving propensity induces a decrease (an increase) in consumption at the steady state when interest rate is positive (negative). It is shown that there is an exact relation between paradoxical comparative statics and a perverse intersection of properly identified curves of demand for and supply of capital in value. The demand curve for capital in value coincides with that of neo-Ricardian analysis. We relate our conclusions to some old and recent issues in capital theory
|Item Type:||Report / Paper (Working Paper)|
|Research documents and activity classification:||Working Papers > Refereed Working Papers / of international relevance|
|Divisions:||Department of Business and Management|
|Additional Information:||The definitive version of the paper has been published in "Metroeconomica", Vol. 60(1), Pages 54-76, February 2009.|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-P/01 Political Economy|
|Deposited By:||Maria Teresa Nistico|
|Deposited On:||17 Dec 2010 16:00|
|Last Modified:||17 Dec 2010 16:00|
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