Intergenerational Equity and the Investing of Rents from Exhaustible Resources

Autor:	John M. Hartwick
Rok vydání:	2017
Předmět:	Microeconomics Hartwick's rule Weak and strong sustainability Intergenerational equity Per capita Economics Capital good Resource depletion Energy source Net national product
DOI:	10.4324/9781315240084-4
Popis:	The present generation's ethical dilemma over shortchanging future generations by overconsuming exhaustible resources could be relieved by a program of converting the capital from these resources into machines and living off the current flow of machines and labor. If the stock of machines is assumed not to depreciate, then the stock of productive capital and resources is not depleted. Cobb-Douglas technology is used to determine what will happen to consumption if only the rents from exhaustible resources are invested in reproducible capital goods. An important feature of Cobb-Douglas technology is that input in the form of minerals from an exhaustible resource is needed to get a positive output of the single produced commodity. Results of the model indicate that a savings investment rule will not provide for the maintenance of per capita consumption constant over time. Further studies have explored the effects of depreciations and intergenerational equity. 7 references.
Databáze:	OpenAIRE
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