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Sustainability and discounted utilitarianism in models of economic growth

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  • Asheim, Geir B.
  • Mitra, Tapan

Abstract

Discounted utilitarianism treats generations unequally and leads to seemingly unappealing consequences in some models of economic growth. Instead, this paper presents and applies sustainable discounted utilitarianism (SDU). SDU respects the interests of future generations and resolves intergenerational conflicts by imposing on discounted utilitarianism that the evaluation be insensitive to the interests of the present generation if the present is better off than the future. An SDU social welfare function always exists. We provide a convenient sufficient condition to identify SDU optima and apply SDU to two well-known models of economic growth.

Suggested Citation

  • Asheim, Geir B. & Mitra, Tapan, 2010. "Sustainability and discounted utilitarianism in models of economic growth," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 148-169, March.
  • Handle: RePEc:eee:matsoc:v:59:y:2010:i:2:p:148-169
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    More about this item

    Keywords

    Intergenerational equity Sustainability Discounted utilitarianism Egalitarian consumption streams Efficiency Exhaustible resources;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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