Valente, Simone (2006): Intergenerational Transfers, Lifetime Welfare and Resource Preservation.
Download (561Kb) | Preview
This paper analyzes overlapping-generations models where natural capital is owned by selfish agents. Transfers in favor of young agents reduce the rate of depletion and increase output growth. It is shown that intergenerational transfers may be preferred to laissez-faire by an indefinite sequence of generations: if the resource share in production is sufficiently high, the welfare gain induced by preservation compensates for the loss due to taxation. This conclusion is reinforced when other assets are available, e.g. man-made capital, claims on monopoly rents, and R&D investment. Transfers raise the welfare of all generations, except that of the first resource owner: if resource endowments are taxed at time zero, all successive generations support resource-saving policies for purely selfish reasons.
|Item Type:||MPRA Paper|
|Institution:||CER ETH Zurich|
|Original Title:||Intergenerational Transfers, Lifetime Welfare and Resource Preservation|
|Keywords:||Distortionary Taxation; Intergenerational Transfers; Overlapping Generations; Renewable Resources; Sustainability; Technological Change|
|Subjects:||Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q20 - General
|Depositing User:||Simone Valente|
|Date Deposited:||05. Dec 2006|
|Last Modified:||13. Feb 2013 20:08|
Azariadis, C. and V. Galasso (2002), �Fiscal Constitutions�. Journal of Economic Theory, 103 : 255�281. Barro, R.J. and X. Sala-i-Martin (2004), Economic Growth. Cambridge MA: MIT Press. Boldrin, M. and A. Rustichini (2000), �Political equilibria with social security�. Review of Economic Dynamics, 3: 41-78. Bovenberg, A.L. and B.J. Heijdra (1998), �Environmental tax policy and intergenerational distribution�. Journal of Public Economics, 67: 1-24. Bromley, D.W. (1990), �The ideology of e¢ ciency: searching for a theory of policy analysis�. Journal of Environmental Economics and Management, 19 : 86-107. Browning, E. (1975), �Why the Social Insurance Budget is Too Large in a Democracy�. Economic Inquiry, XIII : 373-388. Cooley, T.F. and J. Soares (1998), �A Positive Theory of Social Security Based on Reputation�. Journal of Political Economy, 107 : 135-160. Gale, D. (1973), �Pure exchange equilibrium in dynamic economic models�. Journal of Economic Theory, 6: 12-36. Gerlagh R. and M.A. Keyzer (2001), �Sustainability and the intergenerational distribution of natural resource entitlements�. Journal of Public Economics, 79: 315-341. Gerlagh R. and M.A. Keyzer (2003), �E¢ ciency of conservationist measures: an optimist viewpoint�. Journal of Environmental Economics and Management, 46 : 310-333. Hammond, P. (1975), �Charity: Altruism or Cooperative Egoism?�. In E.S. Phelps (ed.), Altruism, Morality and Economic Theory, New York : Russell Sage Foundation. Hotelling, H. (1931), �The economics of exhaustible resources�. Journal of Political Economy, 39 : 137-175. Howarth, R.B. (1991), �Intergenerational Competitive Equilibria under Technological Uncertainty and an Exhaustible Resource Constraint�. Journal of Environmental Economics and Management, 21 : 225-243. Howarth, R.B. and R.B. Norgaard (1990), �Intergenerational resource rights, efficiency, and social optimality�. Land Economics, 66 : 1-11. Kotliko¤, L.J., T. Persson and L. Svensson (1988), �Social contracts as assets: A possible solution to the time-consistency problem�. American Economic Review, 78 : 662�677. Krautkraemer, J.A. and R.G. Batina (1999), �On Sustainability and Intergenerational Transfers with a Renewable Resource�. Land Economics, 75 (2) : 167-184. Marini, G. and P. Scaramozzino (1995), �Overlapping generations and environmental control�. Journal of Environmental Economics and Management, 29 : 64-77. Mourmouras, A. (1993), �Conservationist government policies and intergenerational equity in an overlapping generations model with renewable resources�. Journal of Public Economics, 51 : 249-268. Pezzey, J.C.V. (1992), �Sustainable Development Concepts: an Economic Analysis�. Washington, DC: The World Bank. Rangel, A. (2003), �Forward and Backward Intergenerational Goods: Why is Social Security Good for the Environment?�. American Economic Review, 93 (3) : 813-834. Sjoblom, K. (1985), �Voting for Social Security�. Public Choice, 45 : 225-240. Toman, M.A. (1987), �Existence and optimality of dynamic competitive equilibria with a non-renewable resource�. Resource and Energy Economics, 9 : 1-19. Valente, S. (2005), �Sustainable development, renewable resources and technological progress�. Environmental and Resource Economics, 30 (1) : 115-125.