first best
From Wiktionary, the free dictionary
Alternative forms
Adjective
first best (not comparable)
- (economics) Characterized by all optimality conditions being satisfiable.
- 2018, Lars Ljungqvist and Thomas J. Sargent, Recursive macroeconomic theory, 4th edition, MIT Press, page 200:
- 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.
Noun
first best (plural first bests)
- (economics) A situation where all optimality conditions are satisfied.
Related terms
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