Digitized by the Internet Archive in 2011 with Funding from Boston Library Consortium Iviember Libraries Working Paper Department of Economics ^intertemporal Separability in Overlapping Generations Models

Balasko and Shell have shown that in a pure exchange overlapping generations model with many goods, but a single two period lived Cobb-Douglas consumer in each generation, there is generically a unique perfect foresight price path in which money has no value. If money has value, then generically there is at most one dimension of indeterminacy. Kehoe and Levine have shown that these results do not generalize to models wth many consumers and general preferences. In this paper we show that the crucial assumptions of Balasko and Shell are that each generation has a two period lived representative consumer with a utility function that is separable between periods. Analyzing stationary models, we also show that the Balasko-Shell results continue to hold if the two period lived consvimers are "almost" identical and have "almost" intertemporally separable preferences. Intertemporal Separability in Overlapping Generations Models