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Sustainable Development Without Constraints


  • James A Roumasset

    () (Department of Economics, University of Hawaii at Manoa)

  • Lee H Endress

    (Asia-Pacific Center for Security Studies)


We explore the possibility of representing sustainability concerns in the objective function of an optimal growth problem instead of as a constraint. In a general model with capital accumulation and resource depletion, we represent intergenerational equity using the pure rate of time preference and the elasticity of the marginal social utility of income and that a sustainability constraint would be either redundant or render the optimization problem indeterminate. The model also provides a basis for evaluating the deprecation of natural capital for adjusted national income accounts such that maximizing adjusted national income is equivalent to a period- by - period solution of the intertemporal welfare problem. This approach to sustainability rests on the firm theoretical foundations establish by three pioneers of economic dynamics and growth: Frank Ramsey, Harold Hotelling, and Tjalling Koopmans.

Suggested Citation

  • James A Roumasset & Lee H Endress, 2000. "Sustainable Development Without Constraints," Working Papers 200009, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200009

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    References listed on IDEAS

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    13. Geir B. Asheim, 1988. "Rawlsian Intergenerational Justice as a Markov-Perfect Equilibrium in a Resource Technology," Review of Economic Studies, Oxford University Press, vol. 55(3), pages 469-483.
    14. Tjalling C. Koopmans, 1959. "Stationary Ordinal Utility and Impatience," Cowles Foundation Discussion Papers 81, Cowles Foundation for Research in Economics, Yale University.
    15. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-149.
    16. Johansson,Per-Olov, 1993. "Cost-Benefit Analysis of Environmental Change," Cambridge Books, Cambridge University Press, number 9780521447928, March.
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