Optimal growth and Pareto optimality (Q806652): Difference between revisions

Using the McKenzie-Montrucchio approach to optimal growth problems the authors show that in a stationary intertemporal economy with discrete infinite time span and recursive utilities for each of a finite numbers of agents, every Pareto optimum solution is a solution to a generalized McKenzie problem. In the model, a time invariant set of producible goods is assumed; it depends only on the capital stock level in the previous period. Bellman's and Euler's equations as well as some topological properties of the model are used to generalize dynamic results related to the optimal path of growth.