Sustainability is compatible with decreasing social welfare
This note studies the determination of optimal path - i.e. maximizing the intertemporal social welfare - under a sustainability constraint defined as a non-decreasing intertemporal social welfare accross time. We show that this definition suffers from an important drawback : the path obtained is not Pareto optimal. It is a drawback because nothing in our intuition of sustainable allocation justifies to give up a Pareto improvement. This implies also the possibility of false-negative result in the empirical studies aiming to determine if a country is on a sustainable path.
Volume (Year): 33 (2013)
Issue (Month): 2 ()
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- Stavins, Robert N. & Wagner, Alexander F. & Wagner, Gernot, 2003.
"Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity,"
Elsevier, vol. 79(3), pages 339-343, June.
- Stavins, Robert & Wagner, Alexander & Wagner, Gernot, 2002. "Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity," Working Paper Series rwp02-018, Harvard University, John F. Kennedy School of Government.
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- Heal, G., 1998. "Valuing the Future: Economic Theory and Sustainability," Papers 98-10, Columbia - Graduate School of Business.
- Geir B. Asheim, 2003. "Green national accounting for welfare and sustainability:A Taxonomy Of Assumptions And Results," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 113-130, May.
- Geir B. Asheim, 2002. "Green National Accounting for Welfare and Sustainability: A Taxonomy of Assumptions and Results," CESifo Working Paper Series 827, CESifo Group Munich.
- Asheim, Geir, 2003. "Green national accounting for welfare and sustainability: A taxonomy of assumptions and results," Memorandum 31/2002, Oslo University, Department of Economics.
- BONNEUIL, Noël & BOUCEKKINE, Raouf, 2009. "Sustainability, optimality, and viability in the Ramsey model," CORE Discussion Papers 2009074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Noël Bonneuil & Raouf Boucekkine, 2009. "Sustainability, optimality, and viability in the Ramsey model," Working Papers 2009_34, Business School - Economics, University of Glasgow.
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