Optimality in Infinite Horizon Economies

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Springer Science & Business Media, Jun 29, 2013 - Business & Economics - 182 pages
Modern welfare economics as it is known today to economists took its final shape with the emergence of the Arrow-Debreu model. The classical conjectures about the beneficient workings of markets together with the converse statement, that optimal (in the sense of Pareto) allocations may be sustained by prices and markets, has laid a firm foundation for further research in welfare economics. But more than that, it has inspired researchers to take up entirely new topics, notably by closer considerations of situations where the assumptions of the original model may seem overly restrictive. One of these new directions has been connected with generalizing the model so that it takes into account the possibility of infinitely many commodities. On the face of it, the idea of an infinity of commodities may seem a mathematical fancy having no "real" counterpart in economic life. This is not so, however. Quite to the contrary, infinity enters in a very natural way when it is taken into account that economic transactions take place over time. 2 In the Arrow-Debreu formalism, time may be incorporated into the model in a very simple way using dated commodities. Thus two commodities are considered as being different if they are to be delivered at different points of time.
 

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Contents

INTRODUCTION
1
ONEGOOD PRODUCTION
7
REDUCED MODELS
30
EFFICIENCY CRITERIA
48
THE GENERAL EFFICIENCY CRITERION
56
MEASURES OF CURVATURE
65
APPROXIMATING SETS
86
A FURTHER PROPERTY OF THE FAMILY
92
l 1
100
REDUCED MANYGOODS MODELS 1 16
116
EFFICIENCY CRITERIA FOR MANYGOODS MODELS
138
APPROXIMATIONS OF MANYGOODS MODELS
157
REFERENCES
170
l 8
174
INDEX
177
89
181

MARKET STRUCTURES AND OVERLAPPING
96

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