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Sustainability of an economy relying on two reproducible assets
[Soutenabilité d’une économie reposant sur deux actifs renouvelables]

Author

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  • Robert D. Cairns

    (Centre Interuniversitaire de Recherche en Economie Quantitative, McGill University = Université McGill [Montréal, Canada])

  • Stellio del Campo

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech, EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Vincent Martinet

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

Abstract

The highest utility level that can be sustained in an economy is given by the maximin value. To be able to use this value for sustainability accounting, the corresponding maximin problem must be solved. This paper studies the sustainability of an economy composed of two reproducible assets, each producing one of two consumption goods which are substitutes in utility. We characterize the maximin path of the economy, and associated maximin shadow values. We discuss how these shadow values could be used as accounting prices for development paths that differ from the maximin trajectory. The corresponding genuine savings indicator informs on the improvement or decline of the sustainable level of utility and the prospects of future generations.

Suggested Citation

  • Robert D. Cairns & Stellio del Campo & Vincent Martinet, 2019. "Sustainability of an economy relying on two reproducible assets [Soutenabilité d’une économie reposant sur deux actifs renouvelables]," Post-Print hal-02623141, HAL.
    • Handle: RePEc:hal:journl:hal-02623141
    DOI: 10.1016/j.jedc.2019.02.002
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02623141
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    Cited by:

    1. Cairns, Robert D. & Del Campo, Stellio & Martinet, Vincent, 2019. "Sustainability of an economy relying on two reproducible assets," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 145-160.
    2. Martinet, Vincent & Del Campo, Stellio & Cairns, Robert D., 2022. "Intragenerational inequality aversion and intergenerational equity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue forthcomi.
    3. Cairns, Robert D. & Martinet, Vincent, 2021. "Growth and long-run sustainability," Environment and Development Economics, Cambridge University Press, vol. 26(4), pages 381-402, August.
    4. Carmen Camacho & Hannes Tepper, 2023. "Do this or do that? A model to prioritize reforms," Working Papers halshs-04005785, HAL.
    5. Carmen Camacho & Hannes Tepper, 2023. "Do this or do that? A model to prioritize reforms," PSE Working Papers halshs-04005785, HAL.

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    More about this item

    Keywords

    substituability; subtainability accounting; maximin; maximin value; comptabilité environnementale; substituabilité;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • 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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