Arbeitspapier
The macroeconomics of TANSTAAFL
This paper shows that dynamic inefficiency can occur in dynamic general equilibrium models with fully optimizing, infinitely-lived households even in a situation with underinvestment. We identify necessary conditions for such a possibility and illustrate it in a standard R&D-based growth model. Calibrating the model to the US, we show that a moderate increase in the R&D subsidy indeed leads to an intertemporal free lunch (i.e., an increase in per capita consumption at all times). Hence, Milton Friedman's conjecture There ain't no such thing as a free lunch (TANSTAAFL) may not apply.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 101
- Klassifikation
-
Wirtschaft
Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)
Taxation, Subsidies, and Revenue: General
One, Two, and Multisector Growth Models
- Thema
-
intertemporal free lunch
dynamic inefficiency
R&D-based growth
transitional dynamics
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Grossmann, Volker
Steger, Thomas M.
Trimborn, Timo
- Ereignis
-
Veröffentlichung
- (wer)
-
Universität Leipzig, Wirtschaftswissenschaftliche Fakultät
- (wo)
-
Leipzig
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Grossmann, Volker
- Steger, Thomas M.
- Trimborn, Timo
- Universität Leipzig, Wirtschaftswissenschaftliche Fakultät
Entstanden
- 2011
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