Autore: Hammond, Peter J.
Titolo: Intertemporal objectives
Periodico: European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1990 - Fascicolo: 14 - Pagina iniziale: 1 - Pagina finale: 72

In the Arrow-Debreu model of an intertemporal economy, suppose that the auctioneer sets prices while the government institutes optimal lump-sum transfers period by period. Then examples show how subgame imperfections arise because agents understand how current decisions such as those determining investment will influence either future prices (with finitely many agents), or future lump-sum transfers (even in continuum economies). The latter observation undermines the second efficiency theorem of welfare economics. Allais’ device of dated consumers is extended to a recursive Arrow-Debreu model in which the standard efficiency theorems become true, for a much weaker concept of efficiency. Ways to measure intertemporal welfare are also discussed.




Testo completo: http://hdl.handle.net/1814/353

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