Constant Consumption and the Economic Dpreciation of Natural Capital: The Non-Autonomous Case

Ngo Van Long and John M. Hartwick

No CESifo Working Paper No. 114, CESifo Working Paper Series from CESifo Group Munich

Abstract: We investigate economic depreciation of natural capital for cases of non-stationary output prices, technology, and interest rates. For the former two cases (exogenous movements in prices and technology), constant consumption emerges under a strategy of investing to cover off economic depreciation. The interest rate case requires a modified sinking fund strategy.

Keywords: economic depreciation; natural capital; environment; constant consumption. (search for similar items in EconPapers)
Date: Written

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Related works:
Working Paper: Constant Consumption and the Economic Depreciation of Natural Capital: The Non Autonomous Case (1996)
Journal Article: Constant Consumption and the Economic Depreciation of Natural Capital: The Nonautonomous Case (1999)
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