Is There a General Criterion for Dynamic Efficiency?

This paper analyses an overlapping generations model with absolute bequest motive. It is shown that the widely accepted criterion to verify dynamic efficiency does not apply to this case. In our model the social planner maximizes welfare by choosing a capital stock larger than the golden rule and a real rate of interest smaller than the rate of growth of the economy.

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Year of publication:	1999-08-01
Authors:	Martins, M. A. C. ; Faria, Joao Ricardo
Institutions:	Finance Discipline Group, Business School
Subject:	dynamic efficiency \| bequest motive \| overlapping generations \| capital accumulation

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 89
Classification:	D99 - Intertemporal Choice and Growth. Other ; D69 - Welfare Economics. Other
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005112897