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

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