In his article in the current Journal of Economic Perspectives (Fall 2008), Philippe Weil celebrates 50 years of "'wow factor',... originality and coolness" of the overlapping generations (OLG) model introduced by Paul Samuelson in 1958.
This is a well-deserved homage to a theoretical construct that is probably underused. OLG models are an excellent framework for studying questions about environments in which some factor (such as taxes) influences age cohorts differentially. Retirment and Social Security policy are prime examples of areas of inquiry that have benefited greatly from Samuelson's OLG framework.
I was disappointed to see that Weil neglected to mention one of the key proponents of the OLG method of modeling dynamic stochastic general equilibrium economies with heterogeneous agents--Costas Azariadis (see "An Interview with Costas Azariadis," Macroeconomic Dynamics 11:2, 2007). I love the OLG model and have used it extensively. However, this probably comes from my academic lineage. Costas Azariadis was the advisor of Russell Cooper, who was my advisor.
A last note about the OLG model is its strange acronym. "Overlapping" is clearly one word, yet the most common acronym for these models is "OLG" and not "OG". I tried to use the term "OG" a few years ago, but I couldn't talk to people at conferences. A colleague of mine who did his graduate work at Cornell said that Karl Shell--another pioneer and early proponent of overlapping generations models--prefers to call them "OG" models. So acronym aside, it was nice to see the Journal of Economic Perspectives comparing Samuelson's "innocent little device" to the Mona Lisa. "She is neither beautiful, nor sexy" but her half smile and elegance are enough to make her a classic.
I was disappointed to see that Weil neglected to mention one of the key proponents of the OLG method of modeling dynamic stochastic general equilibrium economies with heterogeneous agents--Costas Azariadis (see "An Interview with Costas Azariadis," Macroeconomic Dynamics 11:2, 2007). I love the OLG model and have used it extensively. However, this probably comes from my academic lineage. Costas Azariadis was the advisor of Russell Cooper, who was my advisor.
A last note about the OLG model is its strange acronym. "Overlapping" is clearly one word, yet the most common acronym for these models is "OLG" and not "OG". I tried to use the term "OG" a few years ago, but I couldn't talk to people at conferences. A colleague of mine who did his graduate work at Cornell said that Karl Shell--another pioneer and early proponent of overlapping generations models--prefers to call them "OG" models. So acronym aside, it was nice to see the Journal of Economic Perspectives comparing Samuelson's "innocent little device" to the Mona Lisa. "She is neither beautiful, nor sexy" but her half smile and elegance are enough to make her a classic.
