A tractable overlapping generations structure for quantitative DSGE models

This paper develops a novel tractable overlapping generations (OLG) structure whose aggregate equations resemble model of an infinitely lived representative agent, except that there are no transversality conditions in the OLG economy. The main assumptions complete markets and time-invariant (but age-dependent) consumption shares age-groups. tractability here distinguishes it from conventional models — present is suitable for quantitative dynamic stochastic general equilibrium (DSGE) macro models. Importantly, maintains key predictions standard models, namely possibility low real interest rates indeterminacy.