Sustainable Markets with Short Sales

Graciela Chichilnisky

A chapter in The Economics of the Global Environment, 2016, pp 147-162 from Springer

Abstract: Abstract Market objectives can conflict with long-term goals. Behind the conflict is the impatience axiom introduced by T. Koopmans to describe choices over time. The conflict is resolved here by introducing a new concept, sustainable markets. These differ from Arrow-Debreu markets in that traders have sustainable preferences and no bounds on short sales. Sustainable preferences are sensitive to the basic needs of the present without sacrificing the needs of future generations and embody the essence of sustainable development (Chichilnisky 1996a, b). Theorems 1 and 2 show that limited arbitrage is a necessary and sufficient condition describing diversity and ensuring the existence of a sustainable market equilibrium where the invisible hand delivers sustainable as well as efficient solutions (Chichilnisky 1991, 1995; Chichilnisky and Heal 1998). In sustainable markets prices have a new role: they reflect both the value of instantaneous consumption and the value of the long-run future. The latter are suitably ambiguous, they are connected to the independence of the axiom of choice at the foundations of mathematics (Godel 1940).

Keywords: Sustainability; Impatience; Axioms for sustainable preferences; Arbitrage; General equilibrium with infinite horizons; D4; Q2; Q5; Z0 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Sustainable markets with short sales (2012)
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:spr:steccp:978-3-319-31943-8_8

Ordering information: This item can be ordered from
http://www.springer.com/9783319319438

DOI: 10.1007/978-3-319-31943-8_8

Access Statistics for this chapter

More chapters in Studies in Economic Theory from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().