Optimal policy in OG models

DOI10.1006/JETH.1999.2561MaRDI QIDQ1976441zbMATH OpenOpenAlexFDO

Authors Christian Ghiglino, Mich Tvede

Publication date 24 October 2001

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1006/jeth.1999.2561

zbMATH Keywords

dynamic modelsgovernment policyoptimal growthproduction economiesturnpike property

Mathematics Subject Classification ID

Economic growth models (91B62)

Review text

A mathematical model of general stationary overlapping generations economies with long-lived consumers, many commodities and productions is considered. An economy is regulated by government via fiscal policy (transfers and taxes). Its aim is to maximize a utilitarian social welfare function, which is a possibly discounted sum of such generations' functions that consisted on weighted sums of the utility functions of the consumers. The consumers maximize their utilities subject to budget constraints and the firms maximize their profits under technological constraints. Both kinds of constraints are depended on the government's policy. Through a transformation of the government's problem into an optimal growth problem, it is shown that if the discounted factor is sufficiently closed to one (discontinuity diminishes) then the optimal trajectory (dynamic equilibrium) has the turnpike property.

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Cites work

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Cited in

(12)

• The observed choice problem in estimating the cost of policies
• Optimal growth and cycles in overlapping generations models
• The optimal policy for the one-against-many heterogeneous Lanchester model
• Pollution, mortality and time consistent abatement taxes
• Optimal public policy \textit{à la Ramsey} in an endogenous growth model
• INEQUALITY AVERSION AND THE OPTIMAL COMPOSITION OF GOVERNMENT EXPENDITURE
• The Pareto-optima of finite-horizon OLG models
• Total utility, overlapping generations and social security
• scientific article; zbMATH DE number 910827 (Why is no real title available?)
• The Existence of an Optimal Economic Policy
• Optimal policies with heterogeneous agents: truncation and transitions
• Optimal taxation in life-cycle economies

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