Review of Economic Studies Vol. 56 No. 1 1989
Intergenerational Altruism, Dynastic Equilibria and Social Welfare
Abstract
The purpose of this paper is to explore the welfare properties of dynastic equilibria. There are three central findings. First, under relatively weak conditions, welfare optima cannot be implemented as dynastic equilibria with positive levels of transfers. Second, intergenerational altruism ordinarily renders the objectives of social planners dynamically inconsistent, thereby making implementation of welfare optima problematic. Third, if a planner successfully resolves dynamic inconsistency by committing himself to respect the preferences of deceased generations, then, in a specific set of cases, dynastic equilibria are approximately welfare optimal.
- DOI
- 10.2307/2297753
- Volume
- 56
- Issue
- 1
- Pages
- 119-128
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref