IDEAS home Printed from https://ideas.repec.org/a/fau/aucocz/au2009_154.html
   My bibliography  Save this article

On the Essential Multidimensionality of an Economic Problem: Towards Tradeoffs-Free Economics

Author

Abstract

The foundation of welfare economics is the assumption of Pareto-efficiency and its concept of tradeoffs. Also the production possibility frontier, efficiency frontier, nondominated set, etc., belong to the plethora of tools derived from the Pareto principle. The assumption of tradeoffs does not address the issue of system design or redesign in order to reduce or eliminate tradeoffs as a sure characteristic of suboptimal, inefficient system configuration. In this paper we establish that tradeoffs are not attributes of objectives, criteria or dimensions, as it is habitually assumed, but are the properties of the very sets of possibilities, alternatives or options they purport to value and measure. We use De novo programming, through which the so called feasible set of opportunities can be redefined towards optimal, tradeoffs-free configuration. The implications of tradeoff-free economics are too vast to foresee and elaborate in a single paper; they do touch the very foundations of economic thought. So me numerical examples are given in order to illustrate system-design calculations in linear systems.

Suggested Citation

  • Milan Zelený, 2009. "On the Essential Multidimensionality of an Economic Problem: Towards Tradeoffs-Free Economics," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 3(2), pages 154-175, July.
    • Handle: RePEc:fau:aucocz:au2009_154
    as

    Download full text from publisher

    File URL: http://auco.cuni.cz/mag/article/download/id/65/type/attachment
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Taylor, John B, 1979. "Estimation and Control of a Macroeconomic Model with Rational Expectations," Econometrica, Econometric Society, vol. 47(5), pages 1267-1286, September.
    2. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adele Celino & Grazia Concilio, 2011. "Explorative Nature of Negotiation in Participatory Decision Making for Sustainability," Group Decision and Negotiation, Springer, vol. 20(2), pages 255-270, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lucas, Robert E, Jr, 1996. "Nobel Lecture: Monetary Neutrality," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 661-682, August.
    2. Amarasekara, Chandranath, 2008. "Have the Sacrifice Ratios Changed under Inflation Targeting? An Empirical Investigation," MPRA Paper 64867, University Library of Munich, Germany.
    3. Wimanda, Rizki E. & Turner, Paul M. & Hall, Maximilian J.B., 2011. "Expectations and the inertia of inflation: The case of Indonesia," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 426-438, May.
    4. Orphanides, Athanasios & Wieland, Volker, 2000. "Inflation zone targeting," European Economic Review, Elsevier, vol. 44(7), pages 1351-1387, June.
    5. Victor Gaiduch & Benjamin Hunt, 2000. "Inflation targeting under potential output uncertainty," Reserve Bank of New Zealand Discussion Paper Series DP2000/08, Reserve Bank of New Zealand.
    6. Lucas, Jr., Robert E., 1995. "Monetary Neutrality," Nobel Prize in Economics documents 1995-1, Nobel Prize Committee.
    7. Mr. Victor Gaiduch & Mr. Benjamin L Hunt, 2000. "Inflation Targeting Under Potential Output Uncertainty," IMF Working Papers 2000/158, International Monetary Fund.
    8. Edward Nelson, 2008. "Friedman and Taylor on monetary policy rules: a comparison," Review, Federal Reserve Bank of St. Louis, vol. 90(Mar), pages 95-116.
    9. Kushal Banik Chowdhury & Nityananda Sarkar, 2019. "Regime Dependent Effect Of Output Growth On Output Growth Uncertainty: Evidence From Oecd Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 71(3), pages 257-282, July.
    10. Michael Paetz, 2007. "Robust Control and Persistence in the New Keynesian Economy," Quantitative Macroeconomics Working Papers 20711, Hamburg University, Department of Economics.
    11. Pyyhtiä, Ilmo, 1999. "The nonlinearity of the Phillips curve and European monetary policy," Bank of Finland Research Discussion Papers 17/1999, Bank of Finland.
    12. Michael A. Clemens, 2017. "The Meaning Of Failed Replications: A Review And Proposal," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 326-342, February.
    13. Frédéric Gannon & Stéphane Hamayon & Florence Legros & Vincent Touzé, 2014. "Sustainability of the French first pillar pension scheme (CNAV): assessing automatic balance," SciencePo Working papers Main hal-03460192, HAL.
    14. David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174, National Bureau of Economic Research, Inc.
    15. Carlos Medel, 2017. "Forecasting Chilean inflation with the hybrid new keynesian Phillips curve: globalisation, combination, and accuracy," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 20(3), pages 004-050, December.
    16. Kamel Helali & Thouraya Boujelbene Dammak, 2019. "Examining the Role of Structural Change in a Phillips Curve: Bivariate GARCH DCC Analysis," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 385-393, September.
    17. Tomasz Grodzicki & Mateusz Jankiewicz, 2020. "Forecasting the Level of Unemployment, Inflation and Wages: The Case of Sweden," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 400-409.
    18. Bordo, Michael D. & Rockoff, Hugh, 2013. "The Influence Of Irving Fisher On Milton Friedman’S Monetary Economics," Journal of the History of Economic Thought, Cambridge University Press, vol. 35(2), pages 153-177, June.
    19. Donald L. Kohn, 2008. "Lessons for central bankers from a Phillips curve framework," Conference Series ; [Proceedings], Federal Reserve Bank of Boston.
    20. Ariane Szafarz, 2015. "Market Efficiency and Crises:Don’t Throw the Baby out with the Bathwater," Bankers, Markets & Investors, ESKA Publishing, issue 139, pages 20-26, November-.

    More about this item

    Keywords

    Tradeoffs; multiple criteria; decision making; tradeoffs-free; optimization; De novo programming; Pareto-efficiency; added value;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fau:aucocz:au2009_154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lenka Stastna (email available below). General contact details of provider: https://edirc.repec.org/data/icunicz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.