A Production OLG Economy with Heterogeneous Agents Let us consider an infinitely lived perfectly competitive overlapping generations economy endowed with two types of two-period lived households namely A and B and one perfectly competitive firm. At every time t, a new generation of size N: is born which is 1 + n times the size of the previous with n E (1, +00). Each generation is endowed with a fraction A E (0,1) of type A households and a fraction 1 :1 of type B households. The lifetime preferences at time t of the representative household A are described by the following logarithmic utility function: U? = crincft + Glnlt + Blncft where a, 9, )3 > 0 denote preference parameters. The lifetime preferences of the representative type B household are described by the following Leontief utility function: U? = Mm{YCiBt J C23t+1} where y > 0 is a preference parameter. The consumption commodity is perishable and is produced at every time t by a single perfectly competitive firm using labour: Y: = ZLE where Yr denotes the aggregate output level, L; stands for the aggregate labour input defined as the aggregate amount of time allocated to work, Z > 0 is a productivity term and a 6 (0,1). At every time 1', each household A in the first-period of life or period 1 is endowed with h unit(s) of time he/she can allocates between leisure It and work 9: at the real wage rate wt, consumes aft unit(s) of the produced commodity and lends 354 > 0 or borrows sf\" 0 or borrows 3,3 0 or to borrow st