Zero discounting and optimal paths of depletion of an exhaustible resource with an amenity value
This paper studies the undiscounted utilitarian optimal paths of the canonicalDasgupta-Heal-Solow model when the stock of natural capital is a direct argument ofwell-being, besides consumption. We use a Keynes-Ramsey rule which yields a generalization of Hartwick’s rule : if society has a zero discount rate but is ready to acceptintertemporal substitution, net investment should not be zero as in the maximin casebut should be positive, its level depending on the distance between the current and thelong run bliss level of utility. We characterize solutions in the Cobb-Douglas utility andproduction case, and analyse the influence of the intertemporal elasticity of substitutionon the time profile of the optimal paths. We show that, in the Cobb-Douglas case, theratio of the values of the resource and capital stocks remains constant along the optimal path, and is independent of initial conditions.
Volume (Year): 118 (2008)
Issue (Month): 6 ()
|Contact details of provider:|| Web page: http://www.cairn.info/revue-d-economie-politique.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antoine D'Autume & Katheline Schubert, 2008.
"Hartwick's rule and maximin paths when the exhaustible resource has an amenity value,"
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- d'Autume, Antoine & Schubert, Katheline, 2008. "Hartwick's rule and maximin paths when the exhaustible resource has an amenity value," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 260-274, November.
- Antoine D'Autume & Katheline Schubert, 2008. "Hartwick's rule and maximin paths when the exhaustible resource has an amenity value," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00275765, HAL.
- Antoine d'Autume & Katheline Schubert, 2008. "Hartwick's rule and maximin paths when the exhaustible resource has an amenity value," Documents de travail du Centre d'Economie de la Sorbonne v08031, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Hartwick, John M, 1977.
"Intergenerational Equity and the Investing of Rents from Exhaustible Resources,"
American Economic Review,
American Economic Association, vol. 67(5), pages 972-74, December.
- John Hartwick, 1976. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," Working Papers 220, Queen's University, Department of Economics.
- repec:oup:restud:v:52:y:1985:i:1:p:153-70 is not listed on IDEAS
- Mitra, Tapan, 1980. "On Optimal Depletion of Exhaustible Resources: Existence and Characterization Results," Econometrica, Econometric Society, vol. 48(6), pages 1431-50, September.
When requesting a correction, please mention this item's handle: RePEc:cai:repdal:redp_186_0827. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.