Saddles, Indeterminacy and Bifurcations in an Overlapping Generations Economy with a Renewable Resource****

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 that their nature 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.