Dynamic Efficiency: Finite Horizons Matter

Bruno Decreuse

G.R.E.Q.A.M. from Universite Aix-Marseille III

Abstract: This paper qualifies Weil [1989]'s according to which dynamic efficiency may fail when agents are infinitely-lived, but "disconnected" from previous ones. It is shown that finite horizons matter in the following sense: if dynamic inefficiency results when the agents have infinite horizons, then there exists a uniquelifetime expectancy aboce (under) which there is a dynamic inefficiency (efficiency). Expressed differently, horizons have to be sufficiently long for over-accumulation to arise.

Keywords: DYNAMIC ANALYSIS; GENERATIONS; SOCIAL WELFARE (search for similar items in EconPapers)
JEL-codes: D61 D90 (search for similar items in EconPapers)
Pages: 10 pages
Date: 1999
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fth:aixmeq:99a17

Access Statistics for this paper

More papers in G.R.E.Q.A.M. from Universite Aix-Marseille III G.R.E.Q.A.M., (GROUPE DE RECHERCHE EN ECONOMIE QUANTITATIVE D'AIX MARSEILLE), CENTRE DE VIEILLE CHARITE, 2 RUE DE LA CHARITE, 13002 MARSEILLE.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().