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Efficient Intertemporal Allocation, Consumption-Value Maximization and Capital-Value Transversality: A Unified View

Cass, David and Majumdar, Mukul (1978) Efficient Intertemporal Allocation, Consumption-Value Maximization and Capital-Value Transversality: A Unified View. Social Science Working Paper, 238. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20171018-162659011

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Abstract

In recent years, based on Malinvaud's seminal work, there have been a number of important contributions towards resolving the following fundamental question: What observable properties characterize some (all) competitive price system(s) associated with an efficient growth path? The natural focus in efforts to answer this question has been on the dynamical behavior of capital-value--"natural" in the sense that Malinvaud's theorem establishes that, under very general conditions, efficient growth is tantamount to the existence of an associated competitive price system with the special property that, in every period, capital-value is minimized among all potential growth paths yielding the same stream of consumption goods thereafter. In other words, dealing with the question eventually reduces to looking for a more concrete version of Malinvaud's capital-value minimization condition.


Item Type:Report or Paper (Working Paper)
Additional Information:Research support from the NSF is gratefully acknowledged. Our ideas themselves have benefited from comments by and conversations with many of our colleague theorists, but particularly the participants in the MSSB seminars on dynamical systems in economics. We would especially like to thank Tapan Mitra. His collaboration with each of us has resulted in deeper understanding of the basic issues raised in the paper (to say nothing of his specific contribution to the insights underlying the extended example worked out at the very end of the paper. Published as Cass, David, and Mukul Majumdara. "Efficient Intertemporal Allocation, Consumption-Value Maximization, and Capital-Value Transversality: A Unified View" The Collected Scientific Work of David Cass 21 (2011): 43.
Group:Social Science Working Papers
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Series Name:Social Science Working Paper
Issue or Number:238
Record Number:CaltechAUTHORS:20171018-162659011
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20171018-162659011
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82474
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:19 Oct 2017 18:40
Last Modified:03 Oct 2019 18:54

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