THE UNIT ROOT PROPERTY AND OPTIMALITY: A SIMPLE PROOF

Consider a pure exchange OLG economy under stationary Markov uncertainty with one good and with sequentially complete markets. It is known that an interior stationary equilibrium allocation at which the agents common matrix of intertemporal rates of substitution has a Perron root which is less than or equal to one is conditionally Pareto optimal. We provide a simple and direct proof of this fact.

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Year of publication:	2000-12
Authors:	Chattopadhyay, Subir
Institutions:	Instituto Valenciano de Investigaciones Económicas (IVIE)
Subject:	Stochastic Overlapping Generations Models \| Pareto Optimality

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Extent:	application/pdf
Series:	Working Papers. Serie AD.
Type of publication:	Book / Working Paper
Notes:	Published by Ivie 13 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005515954