TY - JOUR
T1 - Optimal steady-state in stationary consumption-loan type models
AU - Okuno, Masahiro
AU - Zilcha, Itzhak
N1 - Funding Information:
* Research partially supported by the National Science Foundation and by the Foerder Institute for Economic Research at Tel Aviv University. We would like to thank our referee for some helpful and instructive remarks. We are very grateful to D. Cass and L. Benveniste for pointing out to us several mistakes which existed in the earlier version.
PY - 1983/12
Y1 - 1983/12
N2 - We consider a stationary overlapping generations economy, and prove that an optimal steady state exists. We show that if a government intervention is needed in order to implement the optimal steady state as a competitive equilibrium, it is necessary only in a finite number of periods. If the interest rate associated with the optimal steady state equals the population rate of growth, some outside money may be required in order to make the competitive equilibrium follow the optimal steady state. We show that our existence result enables us to construct Pareto optimal competitive equilibria in some important cases.
AB - We consider a stationary overlapping generations economy, and prove that an optimal steady state exists. We show that if a government intervention is needed in order to implement the optimal steady state as a competitive equilibrium, it is necessary only in a finite number of periods. If the interest rate associated with the optimal steady state equals the population rate of growth, some outside money may be required in order to make the competitive equilibrium follow the optimal steady state. We show that our existence result enables us to construct Pareto optimal competitive equilibria in some important cases.
UR - http://www.scopus.com/inward/record.url?scp=0009053151&partnerID=8YFLogxK
U2 - 10.1016/0022-0531(83)90082-0
DO - 10.1016/0022-0531(83)90082-0
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AN - SCOPUS:0009053151
SN - 0022-0531
VL - 31
SP - 355
EP - 363
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -