Dictionary
Words, grammatical forms and meanings linked to the ontology.
first best en · ADJ
Meanings
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(not-comparable) Characterized by all optimality conditions being satisfiable.
Without a tariff, the competitive equilibrium outcome coincides with the first best allocation.
2025 May 14, Iván Werning, Guido Lorenzoni, Veronica Guerrieri, “Tariffs as Cost-Push Shocks: Implications for Optimal Monetary Policy”, in NBER Working Paper Series, number 33772, page 5:Here the government should avoid any policy that affects the workers' decision rules since it would harm efficiency, and the first-best way of pursuing distributional goals is through lump-sum transfers.
2018, Lars Ljungqvist and Thomas J. Sargent, Recursive macroeconomic theory, 4th edition, MIT Press, page 200:
Forms
first best en · NOUN
Meanings
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A situation where all optimality conditions are satisfied.
Forms
Relateds
third best · second best