IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/10512.html
   My bibliography  Save this paper

Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth I: Consensual optimality

Author

Listed:
  • Mabrouk, Mohamed

Abstract

The objective of this work is to try to define and calculate the optimal growth path, in the presence of exogenous technical change, without resorting to the discounted-sum criterion. The solution suggested is to consider an optimality criterion expressing an Allais-anonymous intergenerational consensus. The partial characterization of consensual optimality was made possible thanks to the decomposition of the dual of the space of sub-geometric sequences of reason p. The main finding is a relation between the marginal rate of substitution between bequest and heritage, and the growth rate, relation which is a necessary condition for consensual optimality. The necessary study of the Pareto-optimality of the consensual optimum is the subject of a forthcoming paper "Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations".

Suggested Citation

  • Mabrouk, Mohamed, 2006. "Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth I: Consensual optimality," MPRA Paper 10512, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:10512
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/10512/1/MPRA_paper_10512.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Toyotaka Sakai, 2003. "Intergenerational preferences and sensitivity to the present," Economics Bulletin, AccessEcon, vol. 4(26), pages 1-5.
    2. Asheim, Geir B. & Buchholz, Wolfgang & Tungodden, Bertil, 2001. "Justifying Sustainability," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 252-268, May.
    3. Geir B. Asheim & Wolfgang Buchholz, 2003. "The Malleability of Undiscounted Utilitarianism as a Criterion of Intergenerational Justice," Economica, London School of Economics and Political Science, vol. 70(279), pages 405-422, August.
    4. Fleurbaey, Marc & Michel, Philippe, 2003. "Intertemporal equity and the extension of the Ramsey criterion," Journal of Mathematical Economics, Elsevier, vol. 39(7), pages 777-802, September.
    5. Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2005. "Arrovian aggregation in economic environments: how much should we know about indifference surfaces?," Journal of Economic Theory, Elsevier, vol. 124(1), pages 22-44, September.
    6. repec:ebl:ecbull:v:4:y:2003:i:26:p:1-5 is not listed on IDEAS
    7. Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467-467.
    8. Gollier, Christian, 2004. "Maximizing the expected net future value as an alternative strategy to gamma discounting," Finance Research Letters, Elsevier, vol. 1(2), pages 85-89, June.
    9. Schelling, Thomas C, 1995. "Intergenerational discounting," Energy Policy, Elsevier, vol. 23(4-5), pages 395-401.
    10. BLACKORBY, Charles & BOSSERT, Walter & DONALDSON, David, 2005. "Intertemporal Social Evaluation," Cahiers de recherche 2005-06, Universite de Montreal, Departement de sciences economiques.
    11. Asheim, Geir B., 1991. "Unjust intergenerational allocations," Journal of Economic Theory, Elsevier, vol. 54(2), pages 350-371, August.
    12. Gollier, Christian, 2002. "Time Horizon and the Discount Rate," Journal of Economic Theory, Elsevier, vol. 107(2), pages 463-473, December.
    13. BOSSERT, Walter & SPRUMONT, Yves & SUZUMURA, Kotaro, 2004. "The Possibility of Ordering Infinite Utility Streams," Cahiers de recherche 12-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    14. Lauwers, Luc, 1998. "Intertemporal objective functions: Strong pareto versus anonymity," Mathematical Social Sciences, Elsevier, vol. 35(1), pages 37-55, January.
    15. John Ferejohn & Talbot Page, 1978. "On the Foundations of Intertemporal Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(2), pages 269-275.
    16. Graciela Chichilnisky, 1996. "An axiomatic approach to sustainable development," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(2), pages 231-257, April.
    17. Heijdra, Ben J., 2017. "Foundations of Modern Macroeconomics," OUP Catalogue, Oxford University Press, edition 3, number 9780198784135.
    18. Geir Asheim & Tapan Mitra & Bertil Tungodden, 2012. "Sustainable recursive social welfare functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 267-292.
    19. Lauwers, Luc, 2000. "Topological social choice," Mathematical Social Sciences, Elsevier, vol. 40(1), pages 1-39, July.
    20. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    21. H. Reiju Mihara, 1997. "Arrow's Theorem, countably many agents, and more visible invisible dictators," Public Economics 9705001, EconWPA, revised 01 Jun 2004.
    22. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    23. Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
    24. Boud, John III, 1990. "Recursive utility and the Ramsey problem," Journal of Economic Theory, Elsevier, vol. 50(2), pages 326-345, April.
    25. Mohamed Mabrouk, 2005. "Optimal growth path in an OLG economy without time-preference assumptions (full text)," GE, Growth, Math methods 0510006, EconWPA.
    26. Chichilnisky, Graciela & Beltratti, Andrea & Heal, Geoffrey, 1994. "The environment and the long run: A comparison of different criteria," MPRA Paper 7907, University Library of Munich, Germany.
    27. Basu, Kaushik & Mitra, Tapan, 2005. "On the Existence of Paretian Social Welfare Relations for Infinite Utility Streams with Extended Anonymity," Working Papers 05-06, Cornell University, Center for Analytic Economics.
    28. Mihara, H. Reiju, 1999. "Arrow's theorem, countably many agents, and more visible invisible dictators1," Journal of Mathematical Economics, Elsevier, vol. 32(3), pages 267-287, November.
    29. MICHEL, Philippe, 1990. "Criticism of the social time-preference hypothesis in optimal growth," CORE Discussion Papers 1990039, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Intergenerational anonymity; Intergenerational equity; Optimal growth; Technical change; Time-preference; Discounted-sum criterion; Consensual criterion; OG economy;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    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:pra:mprapa:10512. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.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.