FINITE LIFETIMES AND GROWTH

In this paper we study the long run growth property of overlapping generations models. It is shown that in one sector models with convex technologies the asymptotic growth rate must be zero. This results because the young do not have sufficient income to purchase a large capital stock. Thus, a policy of income redistribution to the young can generate growth even if financed by income taxation. Additionaly, it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth. © 1992.