ENDOWMENTS, STABILITY, AND FLUCTUATIONS IN OG MODELS

In the present paper we consider a stationary over-lapping-generations model with many commodities and many different consumers and investig ate how the distribution of endowments influences the dynamical proper ties of the model such as stability of steady states and existence of cycles. Our main results are: 1) Preferences place no restrictions on stability properties of steady states; 2) cycles exist for all aggrega te savings (real or nominal); and 3) equilibria of economies with equi libria close to a no-trade equilibrium with constant prices are either steady states or equilibria which converge to a steady state in backw ard time and another steady state in forward time. These results are o btained generically in utility functions and do not depend on whether the utility functions are of the discounted form or not.