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On the Nature of Suppes-Sen Choice Functions in an Aggregative Growth Model

Author

Listed:
  • Dubey, Ram Sewak

    (Cornell University)

  • Mitra, Tapan

    (Cornell University)

Abstract

This paper investigates the nature of paths in the standard neoclassical aggregative model of economic growth that are maximal according to the Suppes-Sen grading principle. This is accomplished by relating such paths to paths which are utilitarian maximal when an increasing (but not necessarily concave) utility function evaluates each period's consumption. An example is presented in which an explicit form of a consumption function is described, which generates only Suppes-Sen maximal paths. This consumption function is shown to generate consumption cycles, and violate the Pigou-Dalton transfer principle.

Suggested Citation

  • Dubey, Ram Sewak & Mitra, Tapan, 2010. "On the Nature of Suppes-Sen Choice Functions in an Aggregative Growth Model," Working Papers 10-06, Cornell University, Center for Analytic Economics.
    • Handle: RePEc:ecl:corcae:10-06
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    File URL: https://cae.economics.cornell.edu/10.06.pdf
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    References listed on IDEAS

    as
    1. Asheim, Geir B. & Buchholz, Wolfgang & Tungodden, Bertil, 2001. "Justifying Sustainability," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 252-268, May.
    2. Basu, Kaushik & Mitra, Tapan, 2007. "Utilitarianism for infinite utility streams: A new welfare criterion and its axiomatic characterization," Journal of Economic Theory, Elsevier, vol. 133(1), pages 350-373, March.
    3. Svensson, Lars-Gunnar, 1980. "Equity among Generations," Econometrica, Econometric Society, vol. 48(5), pages 1251-1256, July.
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    5. Roy Radner, 1961. "Prices and the Turnpike: III. Paths of Economic Growth that are Optimal with Regard only to Final States: A Turnpike Theorem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 98-104.
    6. W. A. Brock, 1970. "On Existence of Weakly Maximal Programmes in a Multi-Sector Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(2), pages 275-280.
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    Citations

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    Cited by:

    1. Chichilnisky, Graciela & Hammond, Peter J. & Stern, Nicholas, 2018. "Should We Discount the Welfare of Future Generations? Ramsey and Suppes versus Koopmans and Arrow," CAGE Online Working Paper Series 386, Competitive Advantage in the Global Economy (CAGE).
    2. Banerjee, Kuntal, 2017. "Suppes–Sen maximality of cyclical consumption: The neoclassical growth model," Journal of Mathematical Economics, Elsevier, vol. 70(C), pages 51-65.

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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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