The '''Cass criterion''', also known as the '''Malinvaud–Cass criterion''', is a central result in theory of overlapping generations models in economics. It is named after David Cass.<ref name="Cass72">{{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 | doi = 10.1016/0022-0531(72)90149-4 | issue = 2}}</ref><ref name="BalaskoShell80">{{citation | last1 = Balasko | first1 = Yves| author-link=Yves Balasko| last2 = Shell| first2 = Karl | author-link2= 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 | doi = 10.1016/0022-0531(80)90013-7 | issue = 3}}</ref>
A major feature which sets overlapping generations models in economics apart from the standard model with a finite number of infinitely lived individuals is that the First Welfare Theorem might not hold—that is, competitive equilibria may be not be Pareto optimal.
If <math>p_t</math> represents the vector of Arrow–Debreu commodity prices prevailing in period <math>t</math> and if
:<math>\sum_{t=0}^{\infty} \frac{1}{\| p_t \| } < \infty ,</math>
then a competitive equilibrium allocation is inefficient.<ref>{{cite book |first=Roger E. A. |last=Farmer |title=The Macroeconomics of Self-fulfilling Prophecies |publisher=MIT Press |year=1999 |page=132 |url=https://books.google.com/books?id=fYmOO_jdGUYC&pg=PA132 |isbn=9780262062039 }}</ref>
== References == {{reflist}}
Category:Economics and time
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