Skip to main content
Article
The Compensation Principle and the National Income Test
The B.E. Journal of Theoretical Economics (2007)
  • Aldo Montesano, Bocconi University
Abstract
According to a common opinion in economic literature, the National Income Test provides a necessary condition for potential Pareto dominance. This paper demonstrates that this statement is true in pure-exchange economies, but, in general, false in production economies.
Keywords
  • compensation principle,
  • national income test,
  • potential welfare,
  • potential pareto dominance
Publication Date
December 15, 2007
Citation Information
Aldo Montesano. "The Compensation Principle and the National Income Test" The B.E. Journal of Theoretical Economics Vol. 7 Iss. 1 (2007)
Available at: http://works.bepress.com/aldo_montesano/1/