On the nature of Suppes-Sen maximal paths in an aggregative growth model

Ram Sewak Dubey, Tapan Mitra

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1 Scopus citations

Abstract

This article investigates the nature of paths in the standard neoclassical aggregative model of economic growth that are maximal according to the Suppes-Sen grading principle. This is accomplished by relating such paths to paths which are utilitarian maximal when an increasing (but not necessarily concave) utility function evaluates each period's consumption. Dynamic properties of Suppes-Sen maximal paths, which lie entirely above or entirely below the golden-rule, are analyzed. An example is presented in which an explicit form of a consumption function is described, which generates only Suppes-Sen maximal paths. This consumption function is shown to generate consumption cycles, and violate the Pigou-Dalton transfer principle.

Original languageEnglish
Pages (from-to)173-205
Number of pages33
JournalSocial Choice and Welfare
Volume40
Issue number1
DOIs
StatePublished - 1 Jan 2013

Keywords

  • Aggregative growth model
  • Consumption cycle
  • Golden rule
  • Non-concave utility function
  • Pigou-Dalton transfer principle
  • Suppes-Sen grading principle
  • Utilitarian maximality

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