Intertemporal Equity and Efficient Allocation of Resources |
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Authors: | Tapan Mitra |
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Institution: | Department of Economics, 418 Uris Hall, Cornell University, Ithaca, New York, 14853, f1tm19@cornell.eduf1 |
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Abstract: | Competitive paths which are efficient are shown to satisfy a terminal cost minimization condition, thereby providing a continuous-time counterpart to the discrete-time result due to Malinvaud. Using this result, competitive paths which are equitable and efficient are shown to satisfy Hartwick's investment rule, which states that the value of net investment is zero at each date. Our result indicates that Hartwick's rule can help to signal inefficiency of competitive equitable paths. Journal of Economic Literature Classification Numbers: C61, D90, O41. |
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Keywords: | intertemporal equity efficiency Hartwick's rule terminal cost minimization |
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