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Pareto-Efficiency and Endogenous Fertility: A Simple Model

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  • PHILIPPE MICHEL
  • BERTRAND WIGNIOLLE

Abstract

Pareto-efficiency of the competitive equilibrium is studied for a simple economy with overlapping generations and endogenous fertility. For CES utility and production functions, the properties of the economy are closely related to the two elasticities of substitution. The competitive equilibrium exists and is unique if the sum of the two elasticities is not less than one. For certain parameters, the equilibrium is both in under-accumulation and inefficient. When the sum of the two elasticities is greater than two, an equilibrium converging in under-accumulation is Pareto-efficient.

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  • Philippe Michel & Bertrand Wigniolle, 2009. "Pareto-Efficiency and Endogenous Fertility: A Simple Model," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 36-59.
    • Handle: RePEc:taf:mpopst:v:16:y:2009:i:1:p:36-59
    DOI: 10.1080/08898480802619587
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    Keywords

    endogenous fertility; Pareto-efficiency;

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