Chapter

Dynamic Utility Functions Proposed

Michio Morishima

in Theory of Economic Growth

Published in print December 1969 | ISBN: 9780198281641
Published online November 2003 | e-ISBN: 9780191596667 | DOI: http://dx.doi.org/10.1093/0198281641.003.0012
 Dynamic Utility Functions Proposed

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Various dynamic utility functions are proposed for optimum economic growth. The different sections of the chapter discuss: maximization of satisfaction over time; whether dynamic utility should be cardinal; the postulated properties of dynamic preferences—separability, consistence, and stationariness; and the invariability of the internal structure of the dynamic utility function with respect to monotonic transformation of the index. All this discussion is based on the assumption that the marginal rate of substitution between any two contemporary goods is independent of consumption in any other period. Finally, an alternative proposal is made based on the fact that the marginal rate of substitution between any two contemporary goods is not independent of consumption in any other period.

Keywords: cardinal utility; consistence; consumption; dynamic preferences; dynamic utility functions; economic growth; goods; internal structure; marginal rate of substitution; maximization of satisfaction; optimum economic growth; separability; stationariness; temporal variation in consumption

Chapter.  7217 words. 

Subjects: Economic Development and Growth

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