Maximin, viability and sustainability

Luc Doyen () and Vincent Martinet

Journal of Economic Dynamics and Control, 2012, vol. 36, issue 9, 1414-1430

Abstract: The maximin criterion defines the highest utility level that can be sustained in an intergenerational equity perspective. The viability approach makes it possible to characterize all the economic trajectories sustaining a given, not necessarily maximal, utility level. In this paper, we exhibit the strong links between maximin and viability: we show that the value function of the maximin problem can be obtained in the viability framework, and that the maximin path is a particular viable path. This result allows us to extend the recommendations of the maximin approach beyond optimality, to characterize the sustainability of economic trajectories which differ from the maximin path. Attention is especially paid to non-negative net investment at maximin accounting prices, which is shown to be necessary to maintain the productive capacity of the economy, whether the development path is optimal or not. Our results provide a new theoretical ground to account for sustainability in imperfect economies, based on maximin prices.

Keywords: Sustainability; Maximin; Viability; Dynamics; Optimality; Genuine savings (search for similar items in EconPapers)
JEL-codes: C61 E21 Q01 Q56 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165188912000668
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Maximin, Viability and Sustainability (2012)
Working Paper: Maximin, Viability and Sustainability (2010)
Working Paper: Maximin, Viability and Sustainability (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:36:y:2012:i:9:p:1414-1430

DOI: 10.1016/j.jedc.2012.03.004

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().