Overlapping Generations Model

The Overlapping Generations Model (OGM) is an economic framework used to analyze how different age groups interact over time. It considers individuals from various generations—young, middle-aged, and elderly—who coexist and make economic decisions. For example, young people might save for retirement, middle-aged individuals invest in education for their children, and retirees rely on savings or pensions. This model helps economists understand issues like public debt, social security, and resource distribution, highlighting how today's decisions affect future generations and the overall economy. It illustrates the interconnectedness of societal choices across time.