Abstract
GALE and ROCKWELL [1975, 1976] and later ATSUMI [1980] reformulated and extended elegantly the MALINVAUD-STARRETT theory. They subdivided the class of all proportional programs into golden and non golden rule programs and showed: (1) Every golden rule program admits at least interest rate which is equal to the growth rate; (2) every efficient proportional non golden rule program can be characterized by an interest rate greater than the growth rate [1975, p.352]. GALE and ROCKWELL commented on these results:
“The theorems show that, for any efficient program, the competitve conditions alone (that is, intertemporal profit maximization) guarantee that (in a steady state) the interest rate will not only be positive but at least as large as the growth rate” [1975, p. 347].
We are grateful to P.Flaschel (Berlin), U.Schweizer (Bonn) and F.-J.Wddopia (Heidelberg) for critical and helpful comments. We assume full responsibility for any remaining errors. This research was supported by the Deutsche Forschungsgemeinschaft.
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Faber, M., Stephan, G. (1986). Neo-Austrian Characterization of Proportional Prices with Positive Rate of Interest Relative to the Growth Rate. In: Faber, M. (eds) Studies in Austrian Capital Theory, Investment and Time. Lecture Notes in Economics and Mathematical Systems, vol 277. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-51701-3_9
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