Cross-Dynastic Intergenerational Altruism

Frikk Nesje

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: This paper studies whether saving behavior reveals socially relevant intertemporal preferences. I decompose the present generation's preference for the next into its dynastic and cross-dynastic components. If people are concerned about sustainability or if their descendants move or marry, then they might assign welfare weights on other dynasties. With such cross-dynastic intergenerational altruism, saving for one's descendants benefits present members of other dynasties. These preference externalities imply that socially relevant intertemporal preferences cannot be inferred from saving behavior. The external effect of present saving decreases over time. This means that intertemporal preferences inferred from saving behavior are time-inconsistent.

Keywords: Intergenerational altruism; Social discounting; Time-inconsistency; Declining discount rates; Generalized consumption Euler equations; Interdependent utility; Isolation paradox; Climate change (search for similar items in EconPapers)
JEL-codes: D64 D71 H43 Q01 Q54 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-env and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/242961/1/cda.pdf (application/pdf)

Related works:
Journal Article: Cross-dynastic intergenerational altruism (2024)
Working Paper: Cross-Dynastic Intergenerational Altruism (2022)
Working Paper: Cross-dynastic Intergenerational Altruism (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:242961

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