Immiserizing Growth in Diamond's Overlapping Generations Model: A Geometrical Exposition
AbstractThe welfare analysis of P. A. Diamond's overlapping generations model is often restricted to a steady-state comparison. This paper demonstrates that a simple diagrammatic technique is useful for a Pareto welfare analysis. In particular, it shows that capital saving technological progress could make all generations (including those which level during the transition period) worse off whenever the economy is dynamic inefficient. On the other hand, technological progress always makes some generations better off when the economy is dynamic efficient. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 32 (1991)
Issue (Month): 1 (February)
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Other versions of this item:
- Kiminori Matsuyama, 1986. "Immiserizing Growth in Diamond's Overlapping Generations Model: AGeometrical Exposition," Discussion Papers 737, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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- Shell, Karl, 1971. "Notes on the Economics of Infinity," Journal of Political Economy, University of Chicago Press, vol. 79(5), pages 1002-11, Sept.-Oct.
- Balasko, Yves & Shell, Karl, 1980. "The overlapping-generations model, I: The case of pure exchange without money," Journal of Economic Theory, Elsevier, vol. 23(3), pages 281-306, December.
- Galor, Oded, 1988. "The Long-run Implications of a Hicks-Neutral Technical Progress," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(1), pages 177-83, February.
- Cremers, Emily T., 2006. "Dynamic efficiency in the two-sector overlapping generations model," Journal of Economic Dynamics and Control, Elsevier, vol. 30(11), pages 1915-1936, November.
- Kuhle, Wolfgang, 2012. "Dynamic efficiency and the two-part golden rule with heterogeneous agents," Journal of Macroeconomics, Elsevier, vol. 34(4), pages 992-1006.
- Partha Sen, 2005. "Perfect Competition and the Keynesian Cross:Revisiting Tobin," Working papers 135, Centre for Development Economics, Delhi School of Economics.
- Wolfgang Kuhle, 2012. "The Dynamics of Utility in the Neoclassical OLG Model," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2012_22, Max Planck Institute for Research on Collective Goods.
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