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Sustainable growth

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This paper explores the view that a criterion of intergenerational equity serves to make choices according to ethical intuitions on a domain of relevant technological environments. In line with this view I first calibrate different criteria of intergenerational equity in the AK model of economic growth, with a given Productivity parameter A, and then evaluate their performance by mapping the consequences of the criteria in various technological environments. The evaluation is based on the extent to which they yield social choice mappings satisfying four desirable properties. The Calvo criterion as well as sustainable discounted utilitarianism and rank-discounted utilitarianism yield sustainable growth in the AK model, the Ramsey technology and the Dasgupta-Heal-Solow-Stiglitz technology for any specifications of these technological environments.

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  • Asheim, Geir B., 2016. "Sustainable growth," Memorandum 07/2016, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2016_007
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    1. Asheim, Geir B. & Zuber, Stéphane, 2016. "Evaluating intergenerational risks," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 104-117.
    2. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2011. "“A dynamic analysis of human welfare in a warming planet”," Journal of Public Economics, Elsevier, vol. 95(11), pages 1607-1620.
    3. Geir B. Asheim & Frikk Nesje, 2016. "Destructive Intergenerational Altruism," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 957-984.
    4. Cass, David & Mitra, Tapan, 1991. "Indefinitely Sustained Consumption Despite Exhaustible Natural Resources," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 1(2), pages 119-146, April.
    5. Asheim, Geir B. & Zuber, Stéphane, 2014. "Escaping the repugnant conclusion: rank-discounted utilitarianism with variable population," Theoretical Economics, Econometric Society, vol. 9(3), September.
    6. Mitra, Tapan & Asheim, Geir B. & Buchholz, Wolfgang & Withagen, Cees, 2013. "Characterizing the sustainability problem in an exhaustible resource model," Journal of Economic Theory, Elsevier, vol. 148(5), pages 2164-2182.
    7. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2010. "Intergenerational justice when future worlds are uncertain," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 728-761, September.
    8. David Gale, 1967. "On Optimal Development in a Multi-Sector Economy," Review of Economic Studies, Oxford University Press, vol. 34(1), pages 1-18.
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    31. Geir B. Asheim & Ivar Ekeland, 2016. "Resource conservation across generations in a Ramsey–Chichilnisky model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(4), pages 611-639, April.
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    Keywords

    Intergenerational; Equity;

    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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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