Regularity and Stability of Equilibria in an Overlapping Generations Growth Model

In an exogenous-growth economy with overlapping generations we analyse local stability of a balanced growth equilibrium (bge) with respect to endowment perturbations, interpreted as transfers. We show that generically in the space of parameters equilibria around bge are locally unique and are locally differentiable functions of endowments, with derivatives given by kernels. Further, those equilibria are stable in the sense that the effects of temporary changes decay exponentially fast at ±∞. Date: February 12, 2012. 2000 Mathematics Subject Classification. 91B14, 91B62 J.E.L. Classification numbers. D50, H43.