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Changes in social welfare in an intertemporal economy

Author

Listed:
  • Elvio Accinelli

    (Facultad de Economía, Universidad Autónoma de san Luis Potosí. Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Leobardo Plata

    (Facultad de Economía, Universidad Autónoma de san Luis Potosí.)

  • Joss Sánchez

    (Facultad de Economía, Universidad Autónoma de san Luis Potosí.)

Abstract

General Equilibrium Theory (GE) scrutinizes the ability of markets to achieve efficient allocation of resources. The main purpose of this work is, in the framework to the GE to analyze, the possibility of design a mechanism enabling agents to make independent decisions compatible with social welfare. More precisely, we address the problem of the possibility of decentralization mechanism to sustain efficiency and social welfare at the same time. Specifically, introducing a social utility function, we argue on the possibility of improving the social welfare transferring resources between periods of the economy. This mechanism introduces a Rawlsian solution improving the welfare of the individuals worst positioned.

Suggested Citation

  • Elvio Accinelli & Leobardo Plata & Joss Sánchez, 2011. "Changes in social welfare in an intertemporal economy," Documentos de Trabajo (working papers) 1611, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:1611
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    File URL: https://hdl.handle.net/20.500.12008/2206
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    References listed on IDEAS

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    1. Willmann, Gerald, 2004. "Pareto gains from trade: a dynamic counterexample," Economics Letters, Elsevier, vol. 83(2), pages 199-204, May.
    2. T. Bergstrom, 1971. "On the Existence and Optimality of Competitive Equilibrium for a Slave Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 23-36.
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    More about this item

    Keywords

    Welfare; efficiency; decentralization;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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