This article develops a tractable graphical device for analyzing the stationary, stochastic overlapping generations economy. In this paper, the graphical device is applied to the theoretical study on stochastic bubbles per Weil (1987) and gives new insights into the issue.

The present paper provides a simple and complete proof of the existence of a stationary monetary equilibrium for a stochastic overlapping generations model with a finite state space. Differently from previous studies, we show that all the prices are positive without the Frobenius theorem.