This paper explores how market power of agents on the capital market affects economic growth and output fluctuations in an overlapping-generations model with endogenous capital accumulation. Agents interact strategically by anticipating how their savings affect the return on savings in...

This article demonstrates that in the standard two-period lived overlapping-generations model with rational expectations, price-taking behavior of agents on the capital market is implausible. We show that market power reduces agents' savings relative to the price-taker benchmark such that less...

It is no secret that the rational expectations framework has endured what many consider to be a well deserved bashing. From problems, such as, ad hoc specifications of functional forms for utility functions, to adoption of utility functions as units of modeling, to absence of equilibriums that...

Attainment of rational expectations equilibria in asset markets calls for the price system to disseminate traders' private information to others. It is known that markets populated by asymmetrically-informed profit-motivated human traders can converge to rational expectations equilibria. This...