It seems that overlapping generation model has far more realistic assumptions than ordinary Ramsey-Prescott RBC model for use in macroeconomics. Why is Ramsey-Prescott ones, even New Keynesian variants, are more popular than overlapping generation ones? Is this just due to simplicity, or is there any fundamental problem with the consequences of overlapping generation model?
Complexity issues are always a factor in choosing model frameworks.
In addition, my feeling is that historically the impressive possibility brought to light by the OG models was that an economy could be "dynamically inefficient" (=being characterized by over-accumulation of capital). After some empirical studies provided evidence that the main western economies did not appear to over-accumulate capital, there was perhaps an impression that the model, while structurally more realistic, had not "that much to offer" to compensate for its added complexity...
Not so, according to Philipe Weil, who celebrated the model's first 50 years of existence in the paper Weil, Philippe. 2008. "Overlapping Generations: The First Jubilee." Journal of Economic Perspectives, 22(4): 115-34. (freely downloadable).
The paper is an enjoyable non-technical read, full of compacted information, knowledge and insights. A quote (bold my emphasis):
This is the rallying cry -in his paper Weil details many aspects and issues raised by the model, and the intuitions that it can provide.