Constant Consumption and the Economic Depreciation of Natural Capital: The Nonautonomous Case

John Hartwick and Ngo Long

International Economic Review, 1999, vol. 40, issue 1, 53-62

Abstract: We investigate economic depreciation of natural capital for cases of nonstationary 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. Copyright 1999 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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