Intertemporal equilibrium with a resource bequest motive
AbstractIn this paper we question the role of a joy-of-giving bequest motive of a privately-owned renewable resource for sustainability. We model an overlapping generations economy in which individuals are endowed with a renewable resource. This resource can be exploited at no cost by the young households and provided to production or bequeathed to the next generation. We highlight two main results. First, the mere existence of a bequest motive does not guarantee a sustainable outcome. Second, when the resource is preserved in equilibrium, its level does not necessarily coincide with the efficient one. Whether the resource stock is too high or too low the capital stock should be lower than the golden rule level.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006022.
Date of creation: 00 Mar 2006
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overlapping generations; joy-of-giving; natural resource; sustainability;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
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