- Cass criterion
The Cass Criterion is a central result in theory of
overlapping generations models ineconomics . It is named afterDavid Cass .citation | last1 = Cass| first1 = David | year=1972 |title= On capital overaccumulation in the aggregative neoclassical model of economic growth: a complete characterization | journal =Journal of Economic Theory | volume = 4| pages = 200-223] citation | last1 = Balasko | first1 = Yves| authorlink=Yves Balasko| last2 = Shell| first2 = Karl | authorlink2= Karl Shell | year=1980|title= The overlapping generations model, I: the case of pure exchange without money | journal =Journal of Economic Theory | volume = 23| pages = 281-306]A major feature which sets
overlapping generations models ineconomics apart from the standard model with a finite number of infinitely lived individuals is that theFirst welfare theorem might not hold, that is competitive equilibria may be not bePareto optimal .If p_t represents the vector of
Arrow-Debreu commodity prices prevailing in period t then acompetitive equilibrium allocation is inefficient if and only ifsum_{t=0}^{infty} frac{1}{| p_t | } < infty .
References
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