Trading Off Generations: Infinitely Lived Agent Versus OLG

Maik Schneider, Christian Traeger and Ralph Winkler

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: The prevailing literature discusses intergenerational trade-offs in climatechange predominantly in terms of the Ramsey equation relying on the infinitelylived agent model. We discuss these trade-offs in a continuous time OLG framework and relate our results to the infinitely lived agent setting. We identify three shortcomings of the latter: First, underlying normative assumptions about social preferences cannot be deduced unambiguously. Second, the distribution among generations living at the same time cannot be captured. Third, the optimal solution may not be implementable in overlapping generations market economies.

Keywords: climate change; intergenerational equity; overlapping generations; time preference; discounting; infinitely lived agents; Social and Behavioral Sciences; Life Sciences (search for similar items in EconPapers)
Date: 2012-01-26
New Economics Papers: this item is included in nep-dge, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Trading Off Generations: Infinitely Lived Agent Versus OLG (2012)
Working Paper: Trading Off Generations: Infinitely-Lived Agent Versus OLG (2010)
Working Paper: Trading Off Generations: Infinitely-Lived Agent Versus OLG (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:agrebk:qt1b58j8m6

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