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Intergenerational anonymity as an alternative to the discounted- sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations

Author

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  • Mohamed Mabrouk

    (Ecole Supérieure de Statistique et d'Analyse de l'Information de Tunis ESSAIT)

Abstract

This paper studies the Pareto-optimality of the consensual optimum established in 'Intergenerational anonymity as an alternative to the discounted-sum criterion I: consensual optimality'. For that, a Pareto- optimality criterion is set up by the application of the generalized Karush, Kuhn and Tucker theorem and thanks to the decomposition of the space of subgeometric sequences of reason p. That makes it possible to find sufficient conditions so that a bequest-rule path is Pareto- optimal. Through an example, it is then shown that the golden rule must be checked to achieve anonymous optimality. The introduction of an additive altruism makes it possible to highlight the intergenerational- preference rate compatible with anonymous optimality. In this approach, it is not any more the optimality which depends on the intergenerational-preference rate, but the optimal intergenerational- preference rate which rises from anonymous optimality.

Suggested Citation

  • Mohamed Mabrouk, 2005. "Intergenerational anonymity as an alternative to the discounted- sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations," GE, Growth, Math methods 0511007, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpge:0511007
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    More about this item

    Keywords

    Intergenerational anonymity; Intergenerational equity; Optimal growth; Technical change; Time-preference; Discounted-sum criterion; Consensual criterion; Pareto-optimality; OG economy;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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