A non-dictatorial criterion for optimal growth models

Alain Ayong Le Kama (), Cuong Le van and Katheline Schubert

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: There are two main approaches for defining social welfare relations for an economy with infinite horizon. The first one is to consider the set of intertemporal utility streams generated by a general set of bounded consumptions and define a preference relation between them. This relation is ideally required to satisfy two main axioms, the Pareto axiom, which guarantees efficiency and the Anonymity axiom, which guarantees equity. Basu and Mitra (2003) show that it is impossible to represent by a function a preference relation embodying both requirements, and Basu and Mitra (2007) propose and characterize a new welfare criterion called utilitarian social welfare relation. In the same framework, Chichilnisky (1996) proposes two axioms that capture the idea of sustainable growth : non-dictatorship of the present and non-dictatorship of the future, and exhibits a mixed criterion, adding a discounted utilitarian part, which gives a dictatorial role to the present, and a long term part, which gives a dictatorial role to the future. The drawback of Chichilnisky's approach is that it often does not allow to explicity characterize optimal growth paths with optimal control techniques. Our aim is less general than Chichilnisky's and Basu and Mitra's : we want to have a non-dictatorial criterion for optimal growth models. We restrict ourselves to the set of utilities of consumptions which are generated by a specific technology. We show that the undiscounted utilitarian criterion pioneered by Ramsey (1928) is not only convenient if one wants to solve an optimal growth problem but also sustainable, efficient and equitable.

Keywords: Anonymity; intergenerational equity; natural resources; non-dictatorship of the future; non-dictatorship of the present; optimal growth models; Pareto; social welfare function; social welfare relation; sustainability; utilitarian undiscounted criterion.; utilitarian undiscounted criterion; Anomymité; équité intergénérationnelle; ressources naturelles; non dictature du futur; non dictature du présent; modèles de croissance optimale; fonction de bien-être social; relation de bien-être social; durabilité; critère utilitariste escompté. (search for similar items in EconPapers)
Date: 2008-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00275758v1
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Published in 2008

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Related works:
Working Paper: A Non-dictatorial Criterion for Optimal Growth Models (2008)
Working Paper: A non-dictatorial criterion for optimal growth models (2008)
Working Paper: A non-dictatorial criterion for optimal growth models (2008)
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