Overlapping generations, intermediation, and the First Welfare Theorem
نویسندگان
چکیده
منابع مشابه
Overlapping generations , intermediation , and the First Welfare Theorem
The First Welfare Theorem fails to hold for standard pure exchange overlapping generations economies because no agent exploits the profit opportunities which can arise from mediating intertemporal trade. This paper modifies the standard economy by introducing an optimizing corporate intermediary which distributes net earnings back to consumer-shareholders. The Pareto inefficient no-trade state,...
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Paul Samuelson’s (1958) overlapping generations model has turned 50. Seldom has so simple a model been so influential. Its “wow” factor, and the feeling of surprise at its originality and coolness have not paled with the years. The paper, in spite of its ripe age, still elicits wonder. Starting from the uncontroversial observation that “we live in a world where new generations are always coming...
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This paper establishes that the profit-seeking activities of private intermediaries can ensure Pareto efficiency in the standard pure-exchange monetary overlapping generations economy without the need for government monetary or fiscal policy intervention. Moreover, these profit-seeking activities are shown to rule out all aperiodic and kperiodic cycles for k greater than 2. Contrary to much rec...
متن کاملActive Intermediation in a Monetary Overlapping Generations Economy
It is now widely believed that government intervention is essential to ensure Pareto efficiency in the standard overlapping generations economy with nonaltruistic agents. This paper argues that the normal profit-seeking activities of private intermediaries—missing from the standard overlapping generations economy—would tend to eliminate the need for such government intervention. A private earni...
متن کاملWelfare Evaluation of Policies in an Overlapping Generations Growth Model
In the classical growth model, with overlapping generations and continuous time starting at −∞, generically there exist a unique equilibrium in the policy-neighbourhood of any balanced growth equibrium as shown in [4]. Policies are endowment perturbations. In this paper we show that, for any such equilibrium selection, welfare is differentiable, and that the derivative at the balanced growth eq...
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ژورنال
عنوان ژورنال: Journal of Economic Behavior & Organization
سال: 1991
ISSN: 0167-2681
DOI: 10.1016/0167-2681(91)90050-8