first best

English

Alternative forms

• first-best

Adjective

first best (not comparable)

1. (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)

1. (economics) A situation where all optimality conditions are satisfied.

Related terms

• second best
• third best