A Consistent Relaxation of the Consumption Invariant Rate in the Discounted-Utility Model

Mehraj Bin Yasaar Parouty, Sipke Visser, Maarten Jacobus Postma

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University of Groningen, Groningen, The Netherlands.

DOI: 10.4236/tel.2013.35A1002                

Abstract

The main theoretical contribution of this paper is a mechanical result that relates growth rates across n commodities. We examplify through a 2-commodity economy of health and money where the results of current health economic theory are confirmed using this technology. The applications are, however, broad; both with regards to spacial discount rates by making relevant assumptions about interpersonal/international comparability and to sustainable growth by envisioning scenarios for the future.

Keywords

Matrix Algebra; Discount Rate; Health-Economics

Conflicts of Interest

The authors declare no conflicts of interest.

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