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Endogenous fertility and the Henry George Theorem
Journal of Public Economics
|August 1, 1996
Summary
This study links overlapping generations (OLG) models with local public goods (LPG) models, revealing how population growth impacts welfare and club efficiency. It explores optimal population growth and land rent taxation for economic efficiency.
Area of Science:
- Economics
- Demography
- Public Finance
Background:
- Endogenous demographic change models analyze population size within welfare economics.
- Overlapping-generations (OLG) models are foundational for studying population dynamics.
- Club theory and local public goods (LPG) models also treat population size as an endogenous variable.
Purpose of the Study:
- To establish and utilize an isomorphism between OLG model steady states and LPG model allocations.
- To re-examine Samuelson's fallacy regarding the goldenest golden rule.
- To investigate institutional frameworks supporting optimal population growth.
Main Methods:
- Comparative analysis of OLG and LPG economic models.
- Exploitation of a newly established isomorphism between model frameworks.
- Revisiting theoretical economic principles and theorems.
Main Results:
- An isomorphism is identified between OLG steady states and LPG allocations.
- The Henry George Theorem's role in club efficiency is analyzed within this framework.
- Samuelson's goldenest golden rule is revisited.
Conclusions:
- The established isomorphism provides new insights into population economics and club theory.
- Optimal population growth can be sustained through specific institutional arrangements.
- Understanding the link between land rent, public goods, and population is crucial for welfare analysis.