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Equity between overlapping generations

Author

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  • John Quiggin

    (Department of Economics, University of Queensland)

Abstract

This note is a demonstration that, in the presence of overlapping generations and under standard conditions for a social welfare ordering (Pareto optimality, transitivity, independence), the only ordering consistent with utilitarianism for all people currently alive at any given point in time is one based on weighting all people equally, regardless of their date of birth. In particular, this implies that, under reasonable conditions, the appropriate choice for the pure rate of social time preference is equal to zero.

Suggested Citation

  • John Quiggin, 2008. "Equity between overlapping generations," Climate Change Working Papers WPC08_1, Risk and Sustainable Management Group, University of Queensland, revised Jun 2008.
  • Handle: RePEc:rsm:climte:c08_1
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    File URL: http://www.uq.edu.au/rsmg/WP/WPC08_1.pdf
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    References listed on IDEAS

    as
    1. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
    2. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, April.
    3. Schelling, Thomas C, 1995. "Intergenerational discounting," Energy Policy, Elsevier, vol. 23(4-5), pages 395-401.
    4. William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. John Quiggin, 2012. "Stabilizing the Global Climate: A Simple and Robust Benefit-Cost Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 291-300.
    2. Stern, Nicholas, 2014. "Ethics, equity and the economics of climate change paper 2: economics and politics," LSE Research Online Documents on Economics 62704, London School of Economics and Political Science, LSE Library.
    3. Tanguy Isaac & Paolo Piacquadio, 2015. "Equity and efficiency in an overlapping generation model," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 549-565, March.
    4. Lugovoy, O. & Polbin, A., 2016. "On Intergenerational Distribution of the Burden of Greenhouse Gas Emissions," Journal of the New Economic Association, New Economic Association, vol. 31(3), pages 12-39.
    5. repec:lsg:lsgwps:wp84 is not listed on IDEAS
    6. Nicholas Stern, 2013. "Ethics, equity and the economics of climate change. Paper 2: Economics and Politics," GRI Working Papers 84b, Grantham Research Institute on Climate Change and the Environment.

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    More about this item

    Keywords

    climate change;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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