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Endogenous Time Preference, and Sustainable Growth and Sustainable Development: An Outlook

Author

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  • Kei Hosoya

    (Professor, Faculty of Economics, Kokugakuin University)

Abstract

This paper makes a distinction between the analytical viewpoints of sustainable growth and sustainable development, which are derived from the concept of sustainability, and conducts a detailed review of the two major research papers that represent the milestones of research on environmental macroeconomics in recent years. Here, the analysis focuses on the point that the research itself introduces an endogenously determined time preference function with a relatively long history, into the dynamic framework of environmental macroeconomics. Research on macroeconomic dynamics has pointed out the importance of so-called “deep parameters.” The rate of time preference is one of such parameters, and we can say that it has also continued to influence macro-theoretical research in environmental economics. The first model examines the impact of environmental taxes under endogenous time preference, in the context of sustainable growth being achieved. Next, the second model derives the dynamic features of the model when complex endogenous time preferences are considered, based on definitions that are rooted in the concept of sustainable development as the constancy of utility over time.

Suggested Citation

  • Kei Hosoya, 2023. "Endogenous Time Preference, and Sustainable Growth and Sustainable Development: An Outlook," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 19(3), pages 1-33, September.
    • Handle: RePEc:mof:journl:ppr19_03_05
    DOI: 10.57520/prippr.19-3-5
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    More about this item

    Keywords

    endogenous time preference; sustainable growth; environmental tax(Pigouvian tax); sustainable development; Hartwick Rule; Hotelling Rule;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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