Population, Impartiality and Sustainability in the Neoclassical Growth Model

Leslie Shiell

No 0504E, Working Papers from University of Ottawa, Department of Economics

Abstract: A resolution is offered to Koopmans’ (1965, 1967a) "paradox of the indefinitely postponed splurge"-i.e. the incompatibility of undiscounted utilitarianism and population weighting in the context of the infinite-horizon neoclassical growth model with exponential population growth. The resolution builds on the conflict between splurging (i.e. dissaving) and sustainability. Consumption paths which contain splurges are not sustained, because they involve reductions in consumption at some point. Thus disallowing unsustained paths removes the incentive to save for a splurge. A modified utilitarian objective is presented which embodies the commitment to sustainability, as well as impartiality and the golden rule. Maximization over the neoclassical technology yields a monotonically increasing path to the golden rule. The underlying ethical position is described as an intergenerational contract: early generations are willing to sacrifice some consumption to build up the capital stock while future generations are morally obligated to limit consumption to the golden rule.

Keywords: population weighting; impartiality; utilitarianism; neoclassical growth model (search for similar items in EconPapers)
JEL-codes: D6 D9 E6 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://sciencessociales.uottawa.ca/economics/sites ... mics/files/0504E.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 502 Bad Gateway (http://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/0504E.pdf [301 Moved Permanently]--> https://sciencessociales.uottawa.ca/economics/sites/socialsciences.uottawa.ca.economics/files/0504E.pdf)

Related works:
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:ott:wpaper:0504e

Access Statistics for this paper

More papers in Working Papers from University of Ottawa, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Aggey Semenov ().