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.
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
pt
t
| infty | |
| \sum | |
| t=0 |
| 1 | |
| \|pt\| |
<infty,
then a competitive equilibrium allocation is inefficient.[1]