IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/10231.html
   My bibliography  Save this paper

Efficiency with Endogenous Population Growth

Author

Listed:
  • Mikhail Golosov
  • Larry E. Jones
  • Michele Tertilt

Abstract

In this paper, we generalize the notion of Pareto-efficiency to make it applicable to environments with endogenous populations. Two efficiency concepts are proposed, P-efficiency and A-efficiency. The two concepts differ in how they treat people who are not born. We show how these concepts relate to the notion of Pareto-efficiency when fertility is exogenous. We then prove versions of the first welfare theorem assuming that decision making is efficient within the dynasty. Finally, we give two sets of sufficient conditions for non-cooperative equilibria of family decision problems to be efficient. These include the Barro and Becker model as a special case.

Suggested Citation

  • Mikhail Golosov & Larry E. Jones & Michele Tertilt, 2004. "Efficiency with Endogenous Population Growth," NBER Working Papers 10231, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10231
    Note: EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w10231.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Mikhail Golosov & Larry E. Jones & Michèle Tertilt, 2007. "Efficiency with Endogenous Population Growth," Econometrica, Econometric Society, vol. 75(4), pages 1039-1071, July.
    3. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.
    4. Nerlove, Marc & Razin, Assaf & Sadka, Efraim, 1987. "Population policy and individual choice: a theoretical investigation," Research reports 60, International Food Policy Research Institute (IFPRI).
    5. Blackorby, Charles & Bossert, Walter & Donaldson, David, 1995. "Intertemporal Population Ethics: Critical-Level Utilitarian Principles," Econometrica, Econometric Society, vol. 63(6), pages 1303-1320, November.
    6. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    7. Becker, Gary S & Murphy, Kevin M, 1988. "The Family and the State," Journal of Law and Economics, University of Chicago Press, vol. 31(1), pages 1-18, April.
    8. Drew Fudenberg & David Levine, 2008. "Subgame–Perfect Equilibria of Finite– and Infinite–Horizon Games," World Scientific Book Chapters,in: A Long-Run Collaboration On Long-Run Games, chapter 1, pages 3-20 World Scientific Publishing Co. Pte. Ltd..
    9. Philippe Michel & Bertrand Wigniolle, 2007. "On Efficient Child Making," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(2), pages 307-326, May.
    10. E. S. Phelps & R. A. Pollak, 1968. "On Second-Best National Saving and Game-Equilibrium Growth," Review of Economic Studies, Oxford University Press, vol. 35(2), pages 185-199.
    11. Streufert, Peter A., 1993. "Markov-perfect equilibria in intergenerational games with consistent preferences," Journal of Economic Dynamics and Control, Elsevier, vol. 17(5-6), pages 929-951.
    12. Broome, John, 2006. "Weighing Lives," OUP Catalogue, Oxford University Press, number 9780199297702.
    13. J. Ignacio Conde-Ruiz & Eduardo L. Giménez & Mikel Pérez-Nievas, 2010. "Millian Efficiency with Endogenous Fertility," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 154-187.
    14. Lakshmi K. Raut, 1996. "Subgame perfect manipulation of children by overlapping generations of agents with two-sided altruism and endogenous fertility," Labor and Demography 9604003, University Library of Munich, Germany.
    15. Samuelson, Paul A, 1975. "The Optimum Growth Rate for Population," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 531-538, October.
    16. Michele Tertilt, 2005. "Polygyny, Fertility, and Savings," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1341-1370, December.
    17. Nerlove, Marc & Raut, Lakshmi K., 1993. "Growth models with endogenous population: A general framework," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 20, pages 1117-1174 Elsevier.
    18. Eckstein, Zvi & Wolpin, Kenneth I., 1985. "Endogenous fertility and optimal population size," Journal of Public Economics, Elsevier, vol. 27(1), pages 93-106, June.
    19. Ehrlich, Paul R. & Ehrlich, Anne H., 2002. "Population, development, and human natures," Environment and Development Economics, Cambridge University Press, vol. 7(01), pages 158-170, February.
    20. Fernando Alvarez, 1999. "Social Mobility: The Barro-Becker Children Meet the Laitner-Loury Dynasties," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(1), pages 65-103, January.
    21. Alvarez, Fernando & Stokey, Nancy L., 1998. "Dynamic Programming with Homogeneous Functions," Journal of Economic Theory, Elsevier, vol. 82(1), pages 167-189, September.
    22. John Broome, 2003. "Representing an ordering when the population varies," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 20(2), pages 243-246, March.
    23. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606, May.
    24. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    25. P. S. Dasgupta, 1969. "On the Concept of Optimum Population," Review of Economic Studies, Oxford University Press, vol. 36(3), pages 295-318.
    26. Blackorby, Charles & Bossert, Walter & Donaldson, David, 2002. "Utilitarianism and the theory of justice," Handbook of Social Choice and Welfare,in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 11, pages 543-596 Elsevier.
    27. Scotchmer, Suzanne, 1997. "On price-taking equilibria in club economies with nonanonymous crowding," Journal of Public Economics, Elsevier, vol. 65(1), pages 75-88, July.
    28. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-1038, October.
    29. Bewley, Truman F., 1972. "Existence of equilibria in economies with infinitely many commodities," Journal of Economic Theory, Elsevier, vol. 4(3), pages 514-540, June.
    30. Partha Dasgupta, 1995. "The Population Problem: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1879-1902, December.
    31. Raut, L. K., 1990. "Capital accumulation, income distribution and endogenous fertility in an overlapping generations general equilibrium model," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 123-150, November.
    32. Harford, Jon D, 1998. "The Ultimate Externality," American Economic Review, American Economic Association, vol. 88(1), pages 260-265, March.
    33. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10231. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.