Maximin-optimal sustainable growth in a resource-based imperfect economy

Andrei Bazhanov

MPRA Paper from University Library of Munich, Germany

Abstract: I offer an approach linking a welfare criterion to the opportunities for sustainable development in an imperfect economy. The approach implies a dependence of the criterion on the economy's current state. The economy-linked criterion is constructed using an example with the maximin principle applied to a hybrid level-growth measure. This measure includes as special cases the conventional measures of consumption level and percent change as a measure of growth. The hybrid measure or geometrically weighted percent can be used for measuring sustainable growth as an alternative to percent. The problem is considered for the Dasgupta-Heal-Solow-Stiglitz model. Closed form solutions are obtained for the optimal paths including the paths dynamically consistent with the updates in reserve estimates.

Keywords: imperfect economy; endogenous preferences; essential nonrenewable resource; geometrically weighted percent; normative resource peak (search for similar items in EconPapers)
JEL-codes: O13 O47 Q32 Q38 (search for similar items in EconPapers)
Date: 2008-10-18, Revised 2009-07-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/16245/1/MPRA_paper_16245.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/16568/1/MPRA_paper_16568.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/19258/2/MPRA_paper_19258.pdf revised version (application/pdf)

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