On the Nature of Suppes-Sen Choice Functions in an Aggregative Growth Model
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.
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- Svensson, Lars-Gunnar, 1980. "Equity among Generations," Econometrica, Econometric Society, vol. 48(5), pages 1251-56, July.
- Roy Radner, 1961. "Prices and the Turnpike: III. Paths of Economic Growth that are Optimal with Regard only to Final States: A Turnpike Theorem," Review of Economic Studies, Oxford University Press, vol. 28(2), pages 98-104.
- W. A. Brock, 1970. "On Existence of Weakly Maximal Programmes in a Multi-Sector Economy," Review of Economic Studies, Oxford University Press, vol. 37(2), pages 275-280.
- Asheim,G.B. & Buchholz,W. & Tungodden,B., 1999.
08/1999, Oslo University, Department of Economics.
- David Gale, 1967. "On Optimal Development in a Multi-Sector Economy," Review of Economic Studies, Oxford University Press, vol. 34(1), pages 1-18.
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