Munich Personal RePEc Archive

Maximin-optimal sustainable growth with nonrenewable resource and externalities

Bazhanov, Andrei (2008): Maximin-optimal sustainable growth with nonrenewable resource and externalities.

[img]
Preview
PDF
MPRA_paper_9510.pdf

Download (361kB) | Preview

Abstract

I offer an approach linking a welfare criterion to the "sustainable development potential" of the economy. This implies a dependence of a criterion on the information about the current state. I consider the problem for the Dasgupta-Heal-Solow-Stiglitz model with externalities. The economy-linked criterion is constructed on an example of 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 closed form solutions are obtained for the optimal paths including the paths, dynamically consistent with the information updates.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.