Efficiency in economic growth models under uncertainty

Itzhak Zilcha

doi:10.1016/0165-1889(92)90003-W

Efficiency in economic growth models under uncertainty

Itzhak Zilcha^*

^*Corresponding author for this work

School of Economics

Research output: Contribution to journal › Article › peer-review

7 Scopus citations

Abstract

We consider an infinite-horizon economy with stochastic production and consumption. We define efficiency of feasible production-consumption programs without referring to a particular utility function, using stochastic ordering. A complete characterization of inefficiency (of type I) is obtained. Equivalence between (type II) efficiency and a certain optimality notion when decision-makers are risk-averse is proved when the number of states of nature is finite at each date.

Original language	English
Pages (from-to)	27-38
Number of pages	12
Journal	Journal of Economic Dynamics and Control
Volume	16
Issue number	1
DOIs	https://doi.org/10.1016/0165-1889(92)90003-W
State	Published - Jan 1992

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Efficiency in economic growth models under uncertainty

Abstract

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