Transaction Costs in an overlapping Generations Model

  • Evry Val d’Essonne, F. Mitterrand
  • Published 2010
We study the stability properties of a Diamond (1965) overlapping generations model in which agents have to pay transaction costs related to the capital accumulated. In particular, these costs depend positively on the amount of individual’s savings. At …rst, we show that under standard conditions, the steady state may be dynamically ine¢cient (e¢cient) if… CONTINUE READING