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Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations

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  • Mabrouk, Mohamed

Abstract

This paper studies the Pareto-optimality of the consensual optimum established in "Allais-anonymity as an alternative to the discounted-sum criterion I: consensual optimality" (Mabrouk 2006a). For that, a Pareto-optimality criterion is set up by the application of the generalized Karush, Kuhn and Tucker theorem and thanks to the decomposition of the space of geometrically-growing real sequences. That makes it possible to find sufficient conditions so that a bequest-rule path is Pareto-optimal. Through an example, it is then shown that the golden rule must be checked to achieve Allais-anonymous optimality. The introduction of an additive altruism makes it possible to highlight the intergenerational-preference rate compatible with Allais-anonymous optimality. In this approach, it is not any more the optimality which depends on the intergenerational-preference rate, but the optimal intergenerational-preference rate which rises from Allais-anonymous optimality.

Suggested Citation

  • Mabrouk, Mohamed, 2006. "Allais-anonymity as an alternative to the discounted-sum criterion in the calculus of optimal growth II: Pareto optimality and some economic interpretations," MPRA Paper 15475, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:15475
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    More about this item

    Keywords

    Intergenerational anonymity; Allais-anonymity; Intergenerational equity; Optimal growth; Technical change; Time-preference; Discounted-sum criterion; Consensual criterion; Pareto-optimality; 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

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