SFB 303 Discussion Paper No. A-427

Author: Schweizer, Urs
Title: Endogenous Fertility and the Henry George Theorem
Abstract: Models of endogenous demographic change deal with population size as an additional object of the welfare analysis. Hereby, the overlapping generations (OLG) model serves as the basic framework. In club theory, population size is also treated as an endogenous variable. In local public goods (LPG) models, the so-called Henry George Theorem which requires local public expenditures to be financed by a 100% tax on aggregate land rent is known as a condition for club efficiency. The present paper establishes and exploits the relation between steady states of the OLG model and allocations of the LPG model. In spite of Samuelson's fallacy concerning his goldenest golden rule, this rule as well as the Henry George Theorem as its LPG counterpart are shown to keep some meaning, not only as a necessary, but also as a sufficient condition for efficiency.
Keywords: Endogenous fertility, club efficiency, Henry George Theorem
JEL-Classification-Number: D71, D90, H41, J13
Creation-Date: Januar 1994
URL: ../1994/a/bonnsfa427.pdf

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