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Economic Growth with Intergenerational Altruism

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  • B. Douglas Bernheim
  • Debraj Ray

Abstract

We consider the properties of equilibrium behaviour in an aggregative growth model with intergenerational altruism. Various positive properties such as the cyclicity of equilibrium programs, and the convergence of equilibrium stocks to a steady state, are analyzed. Among other normative properties, it is established that under certain natural conditions, Nash equilibrium programs are efficient and "modified Pareto optimal" in a sense made clear in the paper, but never Pareto optimal in the traditional sense.

Suggested Citation

  • B. Douglas Bernheim & Debraj Ray, 1987. "Economic Growth with Intergenerational Altruism," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 227-243.
  • Handle: RePEc:oup:restud:v:54:y:1987:i:2:p:227-243.
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    File URL: http://hdl.handle.net/10.2307/2297513
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    Citations

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    Cited by:

    1. Tapan Mitra & Kazuo Nishimura, 2005. "Intertemporal Complementarity And Optimality: A Study Of A Two-Dimensional Dynamical System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 93-131, February.
    2. Maurice Obstfeld, 1989. "Dynamic Seigniorage Theory: An Exploration," NBER Working Papers 2869, National Bureau of Economic Research, Inc.
    3. Nowak, Andrzej S., 2006. "A multigenerational dynamic game of resource extraction," Mathematical Social Sciences, Elsevier, vol. 51(3), pages 327-336, May.
    4. Christopher Harris & David Laibson, 2013. "Instantaneous Gratification," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 205-248.
    5. Hamada, Kojun & Yanagihara, Mitsuyoshi, 2016. "Intergenerational altruism and the transfer paradox in an overlapping generations model," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 161-167.
    6. Wozny Lukasz & Growiec Jakub, 2012. "Intergenerational Interactions in Human Capital Accumulation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-47, June.
    7. Robinson, James A. & Srinivasan, T.N., 1993. "Long-term consequences of population growth: Technological change, natural resources, and the environment," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 21, pages 1175-1298 Elsevier.
    8. Lakshmi Raut, 2006. "Two-sided altruism, Lindahl equilibrium, and Pareto optimality in overlapping generations models," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(3), pages 729-736, April.
    9. Marcello D'Amato & Christian Di Pietro, 2011. "Occupational Mobility and Wealth Evolution in a Simple Model of Educational Investment with Credit Market Imperfections," CSEF Working Papers 300, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2014. "Second-best national saving and growth with intergenerational disagreement," Working Papers 1403, University of Waterloo, Department of Economics, revised Mar 2014.
    11. Ibragimov, Rustam, 2008. "A Tale of Two Tails: Peakedness Properties in Inheritance Models of Evolutionary Theory," Scholarly Articles 2624003, Harvard University Department of Economics.
    12. Blackburn, Keith & Cipriani, Giam Pietro, 2005. "Intergenerational transfers and demographic transition," Journal of Development Economics, Elsevier, vol. 78(1), pages 191-214, October.
    13. AMIR, Rabah, 2001. "Stochastic games in economics: the lattice-theoretic approach," CORE Discussion Papers 2001059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2015. "Future-biased government," Working Papers 1502, University of Waterloo, Department of Economics, revised Oct 2015.
    15. Balbus, Łukasz & Jaśkiewicz, Anna & Nowak, Andrzej S., 2016. "Non-paternalistic intergenerational altruism revisited," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 27-33.
    16. Marcello D’Amato & Christian Pietro, 2014. "Occupational mobility and wealth evolution in a model of educational investment with credit market imperfections," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 73-98, March.
    17. Balbus, Łukasz & Reffett, Kevin & Woźny, Łukasz, 2013. "A constructive geometrical approach to the uniqueness of Markov stationary equilibrium in stochastic games of intergenerational altruism," Journal of Economic Dynamics and Control, Elsevier, vol. 37(5), pages 1019-1039.
    18. Atsue Mizushima & Keiichi Koda, 2007. "Risk Sharing and Growth in the Gifts Economy," Discussion Papers in Economics and Business 07-02, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    19. Hori, Hajime, 1997. "Dynamic Allocation in an Altruistic Overlapping Generations Economy," Journal of Economic Theory, Elsevier, vol. 73(2), pages 292-315, April.
    20. Arthur J. Robson, 2001. "The Biological Basis of Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 11-33, March.
    21. repec:spr:joptap:v:165:y:2015:i:1:d:10.1007_s10957-014-0555-1 is not listed on IDEAS
    22. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2017. "Future-biased Intergenerational Altruism," Working Papers 1703, University of Waterloo, Department of Economics, revised Apr 2017.
    23. Edward P. Lazear, 1994. "Some Thoughts on Savings," NBER Chapters,in: Studies in the Economics of Aging, pages 143-180 National Bureau of Economic Research, Inc.
    24. Rustam Ibragimov, 2008. "A tale of two tails: peakedness properties in inheritance models of evolutionary theory," Journal of Evolutionary Economics, Springer, vol. 18(5), pages 597-613, October.
    25. Simon Fan, C., 2005. "Survival of the gene, intergenerational transfers and precautionary saving," Journal of Development Economics, Elsevier, vol. 76(2), pages 451-479, April.

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