Digitized by the Internet Archive in 2011 with Funding from Boston Library Consortium Iviember Libraries Working Paper Department of Economics - @bullet /regularity-in Overlapping Generations Exchange Economies

In this paper we develop a regularity theory for stationary overlapping generations economies. ¥e show that generically there are an odd number of steady states in which a non-zero amount of nominal debt (fiat money) is passed from generation to generation and an odd number in which there is no nominal debt. We are also interested in non-steady state perfect foresight paths. As a first step in this direction we analyze the behavior of paths near a steady state. We show that generically they are given by a second order difference equation that satisfies strong regularity properties. Economic theory alone imposes little restriction on these paths: With n goods, for example, the only restriction on the set of paths converging to the steady state is that they form a manifold of dimension no less than one ,