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Social choice and economic growth

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  • Nathaniel Beck

Abstract

Optimal economic growth deals with the problem of how societies make tradeoffs between current and future consumption, or equivalently, how societies make decisions about investment rates. Until now, theorists have simply assumed that there is some societal utility function which planners can maximize. Social choice theorists have thrown doubt upon the concept of a societal utility function. We treat optimal economic growth as a problem in social choice theory. Assume that citizens have preferences over the various growth plans. Under what conditions will a majority rule equilibrium exist? We show that such an equilibrium can exist for a Ramsey type problem. We then briefly consider social choice in the so-called “labor surplus” economy. Copyright Martinus Nijhoff Social Sciences Division 1978

Suggested Citation

  • Nathaniel Beck, 1978. "Social choice and economic growth," Public Choice, Springer, vol. 33(2), pages 33-48, September.
    • Handle: RePEc:kap:pubcho:v:33:y:1978:i:2:p:33-48
    DOI: 10.1007/BF00118356
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    References listed on IDEAS

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    1. Stephen A. Marglin, 1963. "The Social Rate of Discount and The Optimal Rate of Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(1), pages 95-111.
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    3. R. H. Strotz, 1955. "Myopia and Inconsistency in Dynamic Utility Maximization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(3), pages 165-180.
    4. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    5. E. S. Phelps & R. A. Pollak, 1968. "On Second-Best National Saving and Game-Equilibrium Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(2), pages 185-199.
    6. N. H. Stern, 1972. "Optimum Development in a Dual Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 39(2), pages 171-184.
    7. A. K. Dixit, 1968. "Optimal Development in the Labour-Surplus Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 35(1), pages 23-34.
    8. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
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    Cited by:

    1. Borissov, Kirill & Pakhnin, Mikhail & Puppe, Clemens, 2017. "On discounting and voting in a simple growth model," European Economic Review, Elsevier, vol. 94(C), pages 185-204.
    2. Fernando Tohmé & M. Ángeles Caraballo & Carlos Dabús, 2022. "Instability, political regimes and economic growth. A theoretical framework," Metroeconomica, Wiley Blackwell, vol. 73(1), pages 291-317, February.
    3. Boylan, Richard T., 1996. "Voting over investment," Journal of Mathematical Economics, Elsevier, vol. 26(2), pages 187-208.

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