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Title:Infinite-horizon choice functions PDF Logo
Authors:Asheim, Geir B.
Bossert, Walter
Sprumont, Yves
Suzumura, Kotaro
Issue Date:2006
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2006,17
Abstract:We analyze infinite-horizon choice functions within the setting of a simple linear technology. Time consistency and efficiency are characterized by stationary consumption and inheritance functions, as well as a transversality condition. In addition, we consider the equity axioms Suppes-Sen, Pigou-Dalton, and resource monotonicity. We show that Suppes-Sen and Pigou-Dalton imply that the consumption and inheritance functions are monotone with respect to time—thus justifying sustainability—while resource monotonicity implies that the consumption and inheritance functions are monotone with respect to the resource. Examples illustrate the characterization results.
Subjects:Intergenerational resource allocation
infinite-horizon choice
JEL:D63
D71
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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