Economic Growth within OLG Framework: the Problem of Dynamic Efficiency and Pareto Optimality

Authors

  • Евгений Валерьевич Гиленко St. Petersburg State University, 7–9, Universitetskaya nab., St. Petersburg, 199034, Russian Federation https://orcid.org/0000-0001-6539-0212

Abstract

The article deals with the problems of dynamic efficiency of capital accumulation and Pareto-optimality of consumer goods distribution between the generations of economic agents in the basic economic growth models within the overlapping generations (OLG) framework. The setups and main properties of deterministic and stochastic versions of the basic OLG-model are discussed in the paper. It is shown that in the deterministic OLG-model, the dynamic efficiency of capital accumulation is directly related to Pareto-optimal consumer goods distribution between the generations of economic agents, while in the stochastic version of the basic OLG-model the dynamic inefficiency is a particular case of Pareto sub-optimality. Some economic policy implications of these situations are discussed in the paper.

Keywords:

deterministic and stochastic overlapping generations models, dynamic efficiency, Pareto optimality, Cass criterion

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Author Biography

Евгений Валерьевич Гиленко, St. Petersburg State University, 7–9, Universitetskaya nab., St. Petersburg, 199034, Russian Federation

Phd in Economics, Associate Professor

References

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Translation of references in Russian into English

Вестник Санкт-Петербургского университета. Серия 5. Экономика. 2013. Вып. 4

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Published

2013-12-30

How to Cite

Гиленко, Е. В. (2013). Economic Growth within OLG Framework: the Problem of Dynamic Efficiency and Pareto Optimality. St Petersburg University Journal of Economic Studies, (4), 130–143. Retrieved from https://economicsjournal.spbu.ru/article/view/2473

Issue

No. 4 (2013)

Section

Mathematical models in economics

License

Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.

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