Stationary pareto optimality of stochastic asset equilibria with overlapping generations

Research output: Contribution to journalArticlepeer-review


A way of establishing the stationary Pareto optimality of asset equilibria in stochastic settings with age diversity among the agents is suggested. Difficulties in obtaining such results arise because agents' behavior is affected by random future state variables while Pareto optimality, defined in terms of expected lifetime utility of representative agents conditioned on their first period state, involves redistributions of consumption among agents with different histories of realized states. Frobenius' theorem is used to establish the existence of weights for which the so-weighted sum of representative agents' (conditional) expected utilities is maximized at the asset equilibrium allocation.

Original languageEnglish
Pages (from-to)396-403
Number of pages8
JournalJournal of Economic Theory
Issue number2
StatePublished - Dec 1984
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics


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