Intergenerational Bubbles of Beliefs for Sustainability

Keiichiro Kobayashi and Asako Chiba
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Asako Chiba: Tokyo Foundation for Policy Research, Tokyo 1066234, Japan

Sustainability, 2020, vol. 12, issue 24, 1-10

Abstract: We constructed a simple model of a dynamic economy in which the current generation chooses to excessively consume, thereby rendering society unsustainable. In such an economy, we assumed that a notional bubbly asset emerges, and its value grows if the current generation conserves adequate resources for future generations. Provided that the bubbly asset is considered valuable, the current generation chooses to conserve resources, rendering the economy sustainable. The condition for sustainability is that the value of this asset grows intergenerationally and indefinitely. The asset represents a belief system, such as a religious doctrine or a political ideology. Results imply that, to restore sustainability, a new intergenerational belief system must be identified, and its value grows indefinitely.

Keywords: belief system; intergenerational altruism; rational-expectations equilibrium; unlimited growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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