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Maximin, viability and sustainability

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  • Doyen, L.
  • Martinet, V.

Abstract

The maximin criterion defines the highest utility level that can be sustained in an intergenerational equity perspective. The viability approach makes it possible to characterize all the economic trajectories sustaining a given, not necessarily maximal, utility level. In this paper, we exhibit the strong links between maximin and viability: we show that the value function of the maximin problem can be obtained in the viability framework, and that the maximin path is a particular viable path. This result allows us to extend the recommendations of the maximin approach beyond optimality, to characterize the sustainability of economic trajectories which differ from the maximin path. Attention is especially paid to non-negative net investment at maximin accounting prices, which is shown to be necessary to maintain the productive capacity of the economy, whether the development path is optimal or not. Our results provide a new theoretical ground to account for sustainability in imperfect economies, based on maximin prices.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 36 (2012)
Issue (Month): 9 ()
Pages: 1414-1430

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Handle: RePEc:eee:dyncon:v:36:y:2012:i:9:p:1414-1430

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Web page: http://www.elsevier.com/locate/jedc

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Keywords: Sustainability; Maximin; Viability; Dynamics; Optimality; Genuine savings;

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References

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Citations

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Cited by:
  1. Robert D. Cairns & Vincent Martinet, 2012. "An Environmental-Economic Measure of Sustainable Development," EconomiX Working Papers 2012-2, University of Paris West - Nanterre la Défense, EconomiX.
  2. L. Doyen & A. Cissé & S. Gourguet & L. Mouysset & P.-Y. Hardy & C. Béné & F. Blanchard & F. Jiguet & J.-C. Pereau & O. Thébaud, 2013. "Ecological-economic modelling for the sustainable management of biodiversity," Computational Management Science, Springer, vol. 10(4), pages 353-364, December.

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