Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63685 
Year of Publication: 
2002
Series/Report no.: 
ETLA Discussion Papers No. 789
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
We incorporate a renewable resource into an overlapping generations model with standard, well-behaved utility and constant returns production functions. Besides being a factor of production the resource serves as a store of value. We characterize dynamics, efficiency and stability of steady state equilibria, and show how their nature in the presence of ‘well-behaved’ resource stock growth depends on the size of the intertemporal elasticity of substitution in consumption. If that elasticity is at least half, but not exactly one, steady states are saddle points. For the values of elasticity less that one half we use a parametric example to demonstrate the existence of stable equilibria (indeterminacy) and a subcritical flip bifurcation. These findings lie in conformity with empirics, which suggest that exploited fish populations exhibit not only the conventionally analyzed steady yields, but also cycles and irregularities.
Subjects: 
overlapping generations
renewable resources
bifurcations
JEL: 
D90
Q20
C62
Document Type: 
Working Paper

Files in This Item:
File
Size
228.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.