Pareto-efficiency and endogenous fertility: a simple model

Philippe Michel and Bertrand Wigniolle ()
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Bertrand Wigniolle: CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris

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Abstract: This article is devoted to the study of the Pareto-efficiency of the competitive equilibrium for a simple overlapping generations economy with endogenous fertility. For CES utility and production functions, it is proved that the economic properties of the economy are closely related to the two elasticitiesof substitution. First, the competitive equilibrium exists and is unique if the sum of the two elasticities is not smaller than one. Secondly, a set of parameters is provided such that the equilibrium is both in under-accumulation and inefficient. Thirdly, a sufficient condition is proved that ensures that an equilibrium converging in under-accumulation is Pareto-efficient: the sum of the two elasticities must not be greater than two.

Keywords: endogenous fertility; Pareto-efficiency (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge
Date: 2008-07-25
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00306463/en/
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