Sustainability with endogenous discounting

John M. Hartwick and Ngo Long

CIRANO Working Papers from CIRANO

Abstract: We construct a dynamic competitive model with a stock of man-made capital and several stocks of natural resources and ask under what conditions consumption will be constant if in nitesimal households with heterogeneous preferences and endowments discount their utility ows at an endogenous rate that depends some macroeconomic variables. We show that for consumption to be constant, this function must be the marginal product ofcapital function. We demonstrate that Hartwicks Rule (that along the constant consumption path, resource rents must be invested in man-made capital) holds in a modi ed form that takes account of natural growth of resource stocks.

JEL-codes: Q01 Q32 (search for similar items in EconPapers)
Date: 2017-10-30
New Economics Papers: this item is included in nep-env, nep-gro and nep-upt
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https://cirano.qc.ca/files/publications/2017s-19.pdf

Related works:
Journal Article: Sustainability with endogenous discounting (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2017s-19

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