Innovative Investments, Natural Resources and Intergenerational Fairness: Are Pension Funds Good for Sustainable Development?

Swiss Journal of Economics and Statistics (SJES), 2005, vol. 141, issue III, pages 355-376

Abstract: We analyse long-term consumption paths in a dynamic two-sector economy with overlapping generations. Each young generation saves for the retirement age, both with private savings and pension funds. The productivity of each sector can be raised by sector-specific research, while the essential use of a non-renewable natural resource poses a threat to consumption possibilities in the long run. Bonds, the two types innovations, and resource stocks are the different investment opportunities. We show that pension funds have a positive impact on long-term development, provided that individuals have a preference for own investments. In this case, sustainability is more likely to be achieved due to pension fund savings.

Keywords: economic growth; pension funds; sustainable development; financial investments; overlapping generations (search for similar items in EconPapers)
JEL-codes: O4 Q01 Q3 G23 (search for similar items in EconPapers)
Date: 2005
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Related works:
Working Paper: Innovative investments, natural resources, and intergenerational fairness: are pension funds good for sustainable development? (2005)
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