Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth I: Consensual optimality

Mabrouk, Mohamed (2006): Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth I: Consensual optimality.

Abstract

The objective of this work is to try to define and calculate the optimal growth path, in the presence of exogenous technical change, without resorting to the discounted-sum criterion. The solution suggested is to consider an optimality criterion expressing an Allais-anonymous intergenerational consensus. The partial characterization of consensual optimality was made possible thanks to the decomposition of the dual of the space of sub-geometric sequences of reason p. The main finding is a relation between the marginal rate of substitution between bequest and heritage, and the growth rate, relation which is a necessary condition for consensual optimality. The necessary study of the Pareto-optimality of the consensual optimum is the subject of a forthcoming paper "Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations".

• Item Type: MPRA Paper
• Language: English
• Keywords: Intergenerational anonymity; Intergenerational equity; Optimal growth; Technical change; Time-preference; Discounted-sum criterion; Consensual criterion; OG economy
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice ; Clubs ; Committees ; Associations; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; D - Microeconomics > D9 - Intertemporal Choice > D90 - General; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis

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