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Family altruism with a renewable resource and population growth

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  • BRECHET, Thierry
  • LAMBRECHT, Stéphane

Abstract

We develop an overlapping-generation model `a la Diamond with a non-constant population growth in which households privately own a natural renewable resource and have a family- altruism resource bequest motive. The natural resource can be either extracted and sold to the producing firms as a production factor, or bequeathed to the offspring to increase his adult disposable income. With a numerical application, we analyze how family altruism interplays with population growth to shape the dynamics of the whole economy. We also highlight the role of altruism in the case of a temporary negative demographic shock. The simulations we present show that a fall in the size of families increases the family natural resource stock but reduces resource extraction on the transition, through a reinforcement of family altruistic links. Hence, family altruism plays a key role in the recovery of the economy after the shock.

Suggested Citation

  • BRECHET, Thierry & LAMBRECHT, Stéphane, 2006. "Family altruism with a renewable resource and population growth," CORE Discussion Papers 2006035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2006035
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    File URL: https://uclouvain.be/en/research-institutes/immaq/core/dp-2006.html
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    References listed on IDEAS

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    1. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    2. BRECHET, Thierry & LAMBRECHT, Stéphane, 2006. "Intertemporal equilibrium with a resource bequest motive," CORE Discussion Papers 2006022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    4. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
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    Cited by:

    1. Kunze, Lars, 2010. "Capital taxation, long-run growth, and bequests," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1067-1082, December.
    2. Lars Kunze, 2009. "Capital Taxation, Long-run Growth, and Bequests," Ruhr Economic Papers 0113, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. repec:zbw:rwirep:0113 is not listed on IDEAS
    4. Bréchet, Thierry & Lambrecht, Stéphane, 2011. "Renewable resource and capital with a joy-of-giving resource bequest motive," Resource and Energy Economics, Elsevier, vol. 33(4), pages 981-994.
    5. Hoberg, Nikolai & Baumgärtner, Stefan, 2017. "Irreversibility and uncertainty cause an intergenerational equity-efficiency trade-off," Ecological Economics, Elsevier, vol. 131(C), pages 75-86.

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