Introduction to Modern Economic Growth overlapping generations, which will be essential in many problems, for example in human capital investments studied in the next chapter In summary, this chapter has provided us with new modeling tools and new perspectives on the question of capital accumulation, aggregate saving and economic growth It has not, however, offered new answers to questions of why countries grow (for example, technological progress) and why some countries are much poorer than others (related to the fundamental cause of income differences) Of course, its purpose was not to provide such answers in the first place 9.10 References and Literature The baseline overlapping generations model with two-period lived agents is due to Samuelson (1958) and Diamond (1965) A related model appears in French in Maurice Allais’ work Blanchard and Fischer (1989, Chapter 3) provide an excellent textbook treatment of the baseline overlapping generations model Some textbooks use this setup as the main workhorse macroeconomic model, for example, Azariadis (1993), McCandless and Wallace (1991) and De La Croix and Michel (2002) The economy studied in Section 9.1 is due to Shell (1974) The source of inefficiency in the overlapping generations model is much discussed in the literature Shell’s (1974) example economy in Section 9.1 provides the clearest intuitive explanation for why the First Welfare Theorem does not apply A lucid discussion is contained in Bewley (2006) The model of overlapping generations with impure altruism is due to Andreoni (1989) This model has been used extensively in the economic growth and economic development literatures, especially for the analysis of equilibrium dynamics in the presence of imperfect capital markets Well-known examples include the models by Aghion and Bolton (1996), Banerjee and Newman (1989, 1994), Galor and Zeira (1993) and Piketty (1996), which we will study in Chapter 22 I am not aware of an analysis of wealth inequality dynamics with perfect markets in this economy along the lines of the model presented in Section 9.6, even though the analysis is quite straightforward A similar analysis of wealth inequality dynamics is included 455