Demonstrating inefficiency in overlapping generations models

Jonathan L. Burke

Economics Letters, 2017, vol. 150, issue C, 108-110

Abstract: We find for overlapping generations models competitive equilibria that are not only Pareto inefficient, but for which every allocation that agrees with the equilibrium in the first period is also Pareto inefficient. That novel additional condition implies that a policy restoring Pareto efficiency is urgent (must start in the first period), and observing just the first period of the equilibrium allocation demonstrates the Pareto inefficiency of the entire allocation.

Keywords: Overlapping generations; Inefficient; Urgent; Demonstrate (search for similar items in EconPapers)
JEL-codes: D5 D6 D9 E4 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:150:y:2017:i:c:p:108-110

DOI: 10.1016/j.econlet.2016.11.004

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