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 Nisticò
Date Deposited: 17 Dec 2010 15:00
Last Modified: 21 Apr 2015 23:14


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