Existence of steady – state equium in an overlapping-generations model with production

This paper establishes an existence theorem of a non-trivial (positive capital stock) steady–state equilibrium in Diamond’s (1965) overlapping-generations model with production by employing the steady–state consumption curve introduced in Ihori (1978). The assumptions on preferences and production technologies that ensure the existence of a nontrivial steady–state equilibrium are separated from each other, unlike in Galor and Ryder (1989). We also provide two simple examples which illustrate the importance of two conditions in the theorem.