The main result is that the golden rule equilibrium (GRE) is Pareto optimal (in the classical sense) in an overlapping generations (OG) model with constant-returns-to-scale production, transfers, arbitrary life-time productivity and homogeneous instantaneous felicity. In addition, we extend Cass and Yaari's equivalence between efficiency (aggregate consumption dominance) and present value dominance (with evaluation made using a candidate equilibrium price path).
Bibliographical notePublisher Copyright:
© Cambridge University Press 2015.
- Exogenous Growth
- Golden Rule Equilibrium
- Infinite Economies
- Overlapping Generations
ASJC Scopus subject areas
- Economics and Econometrics