intergenerational equity and sustainability abstract this paper explores the limitations of conventional economic analysis of intergenerational problems and examines some of the alternatives suggested in the literature it is argued that proper consideration of future generations has at least three requirements first when future costs and benefits are considered it should be taken into account that they are to be enjoyed by different generations second the sustainability requirement should be adopted this represents an equity commitment to the future and implies the recognition that future generations have the right to nondeteriorated ecological and economic capacity the paper studies the ways in which the recognition of these rights might be incorporated into economic evaluation and management third an appropriate institutional network to enforce the recognition of these rights in decision making processes should be constituted its design and necessary functions are also analyzed

sustainability policy and environmental policy a theoretical representative agent economy with a depletable resource stock polluting emissions and productive capital is used to contrast environmental policy which internalises externalised environmental values with sustainability policy which achieves some form of intergenerational equity the obvious environmental policy comprises an emissions tax and a resource stock subsidy each equal to the respective external cost or benefit sustainability policy comprises an incentive affecting the choice between consumption and investment and can be a consumption tax capital subsidy or investment subsidy or a combination thereof environmental policy can reduce the strength of the sustainability policy needed more specialised results are derived in a small open economy with no environmental effects on utility

nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

voting with their money brexit and outward investment by uk firms abstract we study the impact of the 2016 brexit referendum on uk foreign direct investment using the synthetic control method to construct appropriate counterfactuals we show that by march 2019 the leave vote had led to a 17 increase in the number of uk outward investment transactions in the remaining eu27 member states whereas transactions in non eu oecd countries were unaffected these results support the hypothesis that uk companies have been setting up european subsidiaries to retain access to the eu market after brexit at the same time we find that the number of eu27 investment projects in the uk has declined by around 9 illustrating that being a smaller economy than the eu leaves the uk more exposed to the costs of economic disintegration

status in markets this project tests for the effect of social status in a laboratory experimental market we consider a special box design market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices we manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures in the first a subject s score on a trivia quiz determines his or her status in another subjects are assigned randomly to a higher status or lower status group in both treatments we find that average prices are higher in markets where higher status sellers face lowerstatus buyers and lower when buyers have higher status than sellers across all sessions the higher status side of the market captures a greater share of the surplus earning significantly more than their lower status counterparts

non monetary incentives and opportunistic behavior evidence from a laboratory public good game this study reports data from a laboratory experiment that investigates the incentive effect of three distinct social communication schemes on free riding behavior we use performance based approval and disapproval ratings and a linear public good game to address the above issues the treatments vary in terms of subjects opportunities to anonymously assign 1 only the approval ratings to other group members 2 only the disapproval ratings to other group members and 3 either the approval or the disapproval ratings to other group members but not both to the same group member after they play a standard linear public good game despite the nash prediction of zero individual contribution in all three treatments the data show that the disapproval points generate significantly higher contribution than the approval points the treatment in which subjects could communicate either the approval or the disapproval points produces the highest level of contribution we discuss the implications that these findings may have for efficient design of organizations jel d03 h41 c72 c92

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

addressing social dilemmas with mascots information and graphics acknolwedgements this research was supported by funding from the national science foundation for the north east water resources network newrnet grant iia 1330406 and from the center for behavioral and experimental agri environmental research cbear which is supported by the u s department of agriculture economic research service we are grateful for comments received during the 2015 northeastern agricultural and resource economics association annual meeting and the 2015 behavioral and experimental economists of the mid atlantic conference authors listed in alphabetical order

intertemporal equilibria and exhaustible resources an overlapping generations approach abstract this paper presents a general equilibrium model of an abstract intertemporal economy with overlapping generations production possibilities and capital investment under the constraint of a nonreproducible natural resource the model provides for institutionally mandated asset transfers between successive generations under the assumption that each generation has perfect foresight concerning future prices and economic conditions competitive exchange supports a multiplicity of pareto efficient equilibria that correspond to particular asset transfer regimes the achievement of a desirable distribution of welfare between present and future generations requires that the asset transfer regime be chosen according to a social welfare function or explicit distributional criterion economic efficiency per se is insufficient to ensure social optimality these results have important implications for resource planning in the real world where policy makers and the public at large are often highly concerned over the potential impacts of current resource utilization on the welfare of future generations

the role of warnings in regulation keeping control with less punishment abstract regulatory agencies frequently present violators with warnings not pursuing prosecution if the violation ceases upon receipt of the warning we show how such warnings may help regulators to keep control prosecution is costly for the regulator and insufficient prosecution efforts yield low penalties thus with a limited regulatory budget threats of harsh sanctions are credible only if the number of violators is low this produces multiple nash equilibria if firms may make mistakes the economy can accidentally switch from one equilibrium to another warnings reduce substantially the probability of such accidental switches from the full compliance to the no compliance equilibrium

the value and applicability of bargaining in an intergenerational setting abstract this paper considers the effectiveness of a variation of coasian bargaining as a policy instrument for internalizing one or multiple intergenerational externalities the variation involves appointing a contemporary party to represent the interests of the affected parties who are currently unable to represent themselves potential criticisms of such a policy are considered and addressed and precedents to such a policy are put forth to test the value of such a policy a two period model in which two externalities exist in the production consumption decisions and with representative agents is used to compare the welfare effects of four scenarios 1 agents in each period optimize their period specific utility 2 a benevolent social planner chooses allocations in both periods to maximize a social welfare function 3 the externalities are internalized using a bargaining policy and 4 the externalities are internalized using a tax and subsidy policy i find that contrary to general consensus in the literature coasian bargaining can be adapted in such a way as to make it applicable in an intergenerational framework

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

in defense of health based standards abstract this paper explores the utilitarian ethical foundations underlying two standards for pollution control an efficiency standard and a health based standard the main point is that a health based standard can be defended quite easily on utilitarian grounds safety proponents need not be self serving irrational nor ignorant criticism of health based standards as too costly is not always persuasive since material consumption is not the only component of social welfare nor do consumption increases necessarily increase social welfare

nonmonetary sanctions and rewards in an experimental coordination game abstract a growing body of experimental research documents that nonmonetary sanctions and rewards may be important instruments for enforcing efficient behavior this study contributes to this literature by reporting results from a laboratory experiment the experiment is designed to test whether nonmonetary sanctions or rewards alone can yield the optimal level of efficiency in a game with pareto ranked equilibria performance based disapproval and approval ratings assigned by group members are used as proxies for nonmonetary sanction and reward respectively although these ratings are costless and payoff neutral results show that expression of disapproval facilitates coordination on the most efficient equilibrium in contrast statement of approval induces subjects to converge towards the most inefficient outcome we conclude that induced approval and disapproval ratings have asymmetric behavioral effects on coordination

limits to economic growth as shown by a computable general equilibrium model abstract economic growth is distinguished from commercial growth and is defined in this article as the growth of the value a society puts in monetary terms on all commercial and non commercial goods and values it possesses during a certain period a computable general equilibrium model is used to show the impact of changes in the endowments preferences and production possibilities on economic income which in the model comprises all wealth besides land with its natural resources and labor energy is the key endowment to drive an economy the model leads in an intuitive way to the following conclusions 1 societies should start to use appropriate indicators for true economic growth rather than just for commercial growth as measured by gross national product 2 all types of economic growth are limited no matter if based on endowment growth production efficiency growth or changes in preferences 3 economic growth should be oriented more towards increasing production efficiency and less towards using more natural resources 4 human population growth puts at risk the possibilities for average economic growth per person 5 we should get better prepared to use solar energy in the future 6 besides economic growth there exists pure utility growth which is not measurable in monetary terms it includes much of scientific progress in the long run and is of great importance even though it cannot be included in an indicator of economic growth

consumption inequality and family labor supply we examine the link between wage and consumption inequality using a life cycle model incorporating consumption and family labor supply decisions we derive analytical expressions for the dynamics of consumption hours and earnings of two earners in the presence of correlated wage shocks nonseparability progressive taxation and asset accumulation the model is estimated using panel data for hours earnings assets and consumption we focus on family labor supply as an insurance mechanism and find strong evidence of smoothing of permanent wage shocks once family labor supply assets and taxes are properly accounted for there is little evidence of additional insurance jel d12 d14 d91 j22 j31

dimensions of sustainability geographical temporal institutional and psychological well being depends on produced goods natural amenities and preferences each can be influenced through policies and education production of goods exhibits a hierarchical structure similar to ecosystems subsystems adapt while sustaining system productivity that is higher levels have greater resilience in agriculture the farm has little adaptability the region can shift production among locations and a nation can shift among regions forests exhibit an intertemporal geographical hierarchy in which harvests are replaced by growth elsewhere and later regrowth this structure is useful in responding to change and uncertainty preferences too can and must be informed through education

indicators of sustainable development some lessons from capital theory abstract interest in sustainable development has prompted a search for suitable indicators that might complement or supplant the traditional measures of economic success although there is no agreement about the precise meaning of sustainable development one idea which is increasingly in good currency is that sustainable development requires that the stock of capital that one generation passes on to the next be maintained or enhanced further this stock of capital is seen by some to comprise two elements manufactured capital and natural capital the extent to which these are believed to be substitutes or complements is one factor which separates the neoclassical school from some of its critics a premise of this paper is that if capital theory is relevant to sustainable development then it should also be helpful in developing indicators however even within the normal confines of economics capital theory is not a homogeneous body of analysis therefore an exploration of capital theory and its relevance to sustainable development can be expected to generate various perspectives on those measures most useful for gauging the sustainability of economic activity it is these linkages between capital theory in various schools of thought and possible indicators of sustainable development that are the subject of this paper

the political economy of environmental policy with overlapping generations a two sector overlapping generations model illuminates the intergenerational effects of a tax that protects an environmental stock a traded asset capitalizes the economic returns to future tax induced environmental improvements benefiting the current asset owners the old generation absent a transfer the tax harms the young generation by decreasing their real wage future generations benefit from the tax induced improvement in environmental stock the principal intergenerational conflict arising from the tax is between generations alive at the time society imposes the policy not between generations alive at different times a pareto improving tax can be implemented under various political economy settings

brands in motion how frictions shape multinational production following the 2016 leave vote in the referendum on uk membership in the eu and the election of donald trump trade agreements have entered a period of great instability to predict the impact of possible disruptions to existing arrangements requires counterfactual analysis that takes into account the complex set of factors influencing the production and marketing strategies of multinational corporations we estimate a model of multinational decision making in the car industry this model predicts the production reallocation and consumer surplus consequences of changes in tariffs and non tariff barriers induced by nafta termination brexit trans pacific and trans atlantic integration agreements

economic indicators of resource scarcity a critical essay abstract the theoretical arguments of the conceptual and empirical literature on economic indicators of long run resource scarcity are logically flawed if resource allocators were informed of the nature of resource scarcity their behavior and the economic indicators it generates would reflect the scarcity but if they were so informed we could simply ask them if resources were scarce if they are not informed their behavior and economic indicators are as likely to indicate their ignorance as the reality unfortunately there is no way of knowing whether they are informed or not unless we already know whether resources are scarce

exploration and scarcity noting that a suggested measure of natural resource scarcity resource rent is unobservable we show that rent is linked to observable marginal exploration cost a two period model of extraction and exploration reveals that rent is equal to this cost when discovery is certain under risky exploration cost data can be used to bound rent the model also indicates how exploration uncertainty affects the competitive firm s extraction and exploration decisions finally the behavior of u s oil and gas exploration costs suggests that these costs were rising in the postwar era which has different implications for scarcity than indicated by other measures of scarcity

concepts of efficiency in ecological economics sisyphus and the decision maker abstract efficiency forms the bedrock of policy planning and business approaches to sustainable development but what do ecological economists mean by efficiency in the resource use context efficiency has a wide range of potential interpretations from the ratio of work output energy inputs to pareto efficiency despite the potential richness of the efficiency concept in practice efficiency is often narrowly conceived within disciplinary boundaries this appears to be the case even in ecological economics which purports to be transdisciplinary and pluralistic such narrow disciplinary perspectives essentially waste the richness of the efficiency concept this wasting could mean ecological economists and decision makers are destined to sisyphean toil in the pursuit of sustainable development this paper explores the efficiency concept and its interpretation it then reviews ecological economic literature to find that there is much room for improvement in the way ecological economists apply efficiency finally the paper presents a framework within which a truly ecological economic approach to efficiency can emerge armed with this framework policy makers and planners should be better prepared to make decisions leading to sustainable development

incomplete information strengthens the effectiveness of social approval we present a theoretical model of a public good game in which the expression of social approval induces pro social behavior using a laboratory experiment with earned heterogeneous endowments we test our model the main hypothesis is that the expression of social approval increases cooperative behavior even if reputation building is impossible we vary the information available and investigate how this affects the expression of social approval and individual contributions the expression of social approval significantly increases contributions however the increase is smaller if additional information is provided suggesting that social approval is more effective if subjects receive a noisy signal about others contributions jel c72 c91 d71 d83

toward consilience between biology and economics the contribution of ecological economics abstract during its ten year history ecological economics has made a real difference in the way economists look at the natural world and in the way biologists look at the economy in this survey article we examine the contributions to the journal in terms of e o wilson s concept of consilience that is his argument that the methods and assumptions of any field of study should be consistent with the known and accepted facts in other disciplines in particular we examine the contributions of ecological economics to reconciling the economic theory of the consumer and producer with biophysical reality

policies for sustainability lessons from an overlapping generations model discounting is often considered inimical to sustainability reliance on the assumption that endowments regulate the transfer of assets to the future in standard growth models interprets the interest rate in the intergenerational context as a partial reflection of myopia a more complete market model that allows agents from different generations to engage in long term contracts with one another severs the movement of capital to the future from the endowment assumption adherence to the endowment assumption as a de facto market structure not simply a modeling convenience endorses sustainability policies that injure the future

is aging harmful to the environment how does aging affect the environment we analyze this question using anoverlapping generations model featuring uncertain lifetimes andenvironmental externalities we show that whether aging is harmful to theenvironment depends on the curvature of utility function which ismeasured by the degree of relative risk aversion we also explore theimplication of the results for environmental policy in an aging society

using the fisherian concept of income to guide a nation s transition to a steady state economy abstract many ecological economists have long been advocating that industrialised nations should abandon their growth predilection and initiate the transition to a steady state economy to demonstrate how a nation s transition to a steady state economy might be usefully guided fisherian national income one of the best known indicators of sustainable economic welfare is calculated for australia for the period 1967 1997 also calculated for the study period is the changing physical scale of the australian economy by juxtaposing per capita fisherian income and the growth of the australian economy it is shown that australia surpassed its optimal macroeconomic scale in the mid 1970s while around this time australia began a transition to a lower rate of growth that arrested the steep decline in per capita fisherian income australia had reverted back to a high growth policy by the end of the study period it chose not to continue the deceleration towards a steady state economy a policy stance that is likely to be detrimental to the sustainable economic welfare enjoyed by the average australian

entitlements missing markets and environmental uncertainty reply abstract at one level dore and ward seem intent on immunizing received doctrine they say that i did not prove that rights violated nozick s principles of justice and that i did not prove that missing markets were the problem more telling they allege i did not prove that my story was better than the particular story favored by dore and ward that is they argue that there is an alternative approach based on the theory of public economics which is indeed operational 3 they then use the bulk of their comment to explain and defend this alternative model they hope to convince the reader that the model of public economics survives intact in the face of my alternative model to the extent that their model allows one to define the problem away it is not difficult to see why they find it so compelling more seriously dore and ward fail to make a coherent argument about the concept of rights and duties and the logic of a particular rights structure that happens to prevail they seem concerned that my article was tampering with some sacred social construct the status quo rights structure and that my article threatened the received wisdom of both public economics and paretian walrasian bliss indeed theirs seems to be a genuine fear that if economists release their grip on the certitude of received orthodoxy the floodgates will be open to all manner of bumbling regulators seeking to shift rights and wealth positions across generations my article is apparently threatening because it seems to suggest that the received wisdom may at times be misleading

productive efficiency in the middle east and north africa productive efficiency and factors affecting it in 11 countries in the middle east and north africa region were evaluated over the period 1980 to 1999 using fare s nonparametric approach the results indicate that oil producing countries are more efficient in terms of production compared with non oil producing countries tobit analyses indicate that previous levels of efficiency the degree of economic openness consumption of domestically produced goods and the limited availability of credit have a positive impact on production efficiency a sensitivity analysis using the bias corrected bootstrap technique shows that allocative efficiency and economic efficiency are more sensitive to the returns to scale assumption and sample size than pure technical efficiency

trade liberalization and the skill premium a local labor markets approach trade economists have long studied the effects of globalization on wage differences between workers with different levels of skill or education 1 this literature has generally sought to link globalization to changes in the economy wide skill premium attanasio goldberg and pavcnik 2004 and gonzaga menezes filho and terra 2006 are salient examples that investigate whether changes in sector specific prices or tariffs changes in skill composition within and across sectors and movements in the skill premium are consistent with the predictions of workhorse trade models such as the heckscherohlin model however there is little evidence directly establishing a causal effect of globalization on the skill premium 2 more recently a growing body of research has focused on trade s differential effects across local markets within a country 3 in this paper we combine these two strands of literature by developing a theoretically consistent approach to studying the causal

limits to growth and sustainable development grappling with ecological realities abstract the paper has three main sections the first discusses the limits to growth debate of the 1970s identifying concern with three potential kinds of limits ecological limits to the physical scale of economic activity limits to the economic welfare to be derived from growth of economic activity and social limits to economic growth the second section explores the same issues through the sustainable development literature of the late 1980s and the 1990s to date the principal change over the 20 years concerned a period also framed by the stockholm environment conference and unced is far greater acceptance of the existence of threatening environmental damage and the need for active policy to address it no consensus has yet emerged however on the relationship between economic growth and welfare or ecological or social sustainability the third section indicates the scale of the task if global economic growth is to be reconciled with ecological sustainability and advocates a strategy for sustainability that principally involves differentiating between north and south and forging new economic relations between them

achieving a secure energy future environmental and economic issues abstract energy economics and the environment are interdependent land water atmospheric and biological resources are being degraded by current high energy consumption u s energy consumption is the highest in the world and the u s department of energy reports that the united states has only about 10 years of known and potentially discoverable oil reserves the u s should reduce its energy consumption by one half to help restore the quality of the environment while improving the american standard of living by strengthening the economy and increasing the number of jobs because of the interdependence of energy economics and the environment energy efficiency and transition to renewable energy sources are critical an estimated 40 of current energy consumption could be produced employing solar energy technologies but would require about 20 of total u s land area therefore the development of solar energy technologies to substitute for fossil energy is projected to compete for land required for agriculture and forestry as well as have other environmental impacts

trust law sustainability and responsible action abstract the problem of managing for sustainability is marked by the need to make decisions on behalf of others and by the uncertainties that attend such decisions however the economic literature on sustainability has paid scant attention to how decisions on behalf of others might differ from decisions on behalf of oneself and when risk has been modeled explicitly the expected utility hypothesis has generally been used a generation acts sustainably if the expected value of the next generation s utility is not less than the present s this paper investigates how we think about responsibly acting on another s behalf by looking to the united states law of trusts because in important respects the current generation views its responsibility to the future as a trust relationship trust law illuminates responsible decision making under both risk and uncertainty even under conditions of risk more conservative action than would be suggested by the expected utility hypothesis is warranted because it emphasizes preservation of trust principal and disavows profit maximization trust doctrine indicates that special caution should be exercised in conditions of uncertainty finally resource economic concepts of strong sustainability the precautionary principle and the safe minimum standard of conservation are interpreted according to trust principles

searching for sustainability the poverty of spontaneous order abstract traditional approaches to sustainability rely on models that depend upon judgments of welfare across future generations right prices and some sense as to what future persons will find giving of utility these models both accept the spontaneous order of market processes and rely on that order to derive optimal consumption paths into the future sustainability is however not a problem of divining optimal paths predicated upon right prices rather sustainability to be operational requires a prior constructed order predicated upon rights for future persons and duties for those now living who sit in a position as dictator over the settings and circumstances that will be passed on to future persons rights based approaches to sustainability do not rely upon unknowable preferences of future persons but rather upon an environmental regency in which those now living agree to preserve settings and circumstances for the future this reminds us that the issue of sustainability concerns not how much to preserve but what to preserve

no excuses for good behavior volunteering and the social environment abstract we study the effect of the social environment on the quantity and quality of voluntary labor contributions by extending benabou and tirole s 2006 image signaling framework we derive theoretical predictions on time volunteered given 1 the availability of excuses to stop volunteering and 2 the presence of an authority figure we test these predictions in an experiment where laboratory subjects are directly involved in a local nonprofit operation we find that in the absence of excuses to stop volunteering subjects volunteer longer without working less productively this increase is partially driven by subjects reluctance to be the first to stop volunteering the presence of an authority figure has little impact but the presence of peers has a positive and significant impact

rank as an inherent incentive evidence from a field experiment abstract money is the prime incentive considered in economic models however recent evidence indicates that people are also greatly concerned about their social rankings is this solely because rank brings tangible benefits or because in addition people have an inherent preference for high rank this paper deployed a field experiment that provides evidence for an inherent preference in the experiment vietnamese students enrolled in an english course performed significantly better on the official standardized international final test when they were told their rankings on practice tests than when they were not this result held even when this ranking information could not be reliably communicated thus severely attenuating the potential to bring tangible or status benefits

providing advice to jobseekers at low cost an experimental study on online advice we develop and evaluate experimentally a novel tool that redesigns the job search process by providing tailored advice at low cost we invited jobseekers to our computer facilities for twelve consecutive weekly sessions to search for real jobs on our web interface for one half instead of relying on their own search criteria we use readily available labour market data to display relevant alternative occupations and associated jobs the data indicate that this broadens the set of jobs they consider and increases their job interviews especially for participants who otherwise search narrowly and have been unemployed for a few months

irreversibility and uncertainty cause an intergenerational equity efficiency trade off abstract two important policy goals in intergenerational problems are pareto efficiency and sustainability i e intergenerational equity we demonstrate that the pursuit of these goals is subject to an intergenerational equity efficiency trade off our analysis highlights two salient characteristics of intergenerational problems and policy i temporal irreversibility i e the inability to revise one s past actions and ii uncertainty of future consequences of present actions in human environment systems we employ a two non overlapping generations model that combines an intragenerational production decision on the use of circulating capital and a non renewable resource with a negative intergenerational externality as an unforeseen contingency if initially unknown problems become apparent and policy is enacted after irreversible actions were taken policy making faces a fundamental trade off between ex post pareto efficiency and sustainability that is one can achieve either one of these two goals but not both

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

intergenerational resource rights efficiency and social optimality the discipline of economics is generally defined as the science of the allocation of scarce resources between competing social objectives given an initial distribution of resources between economic agents how would they behave so as to improve their welfare according to the pareto criterion the agents would exchange commodities until the opportunities for fruitful exchange were fully exhausted and no agent could be made better off without rendering at least one other agent worse off pareto efficiency is a powerful concept in microeconomic analysis provided that the initial distribution of property rights is equitable allocative efficiency gives rise to the best of all possible worlds acknowledging that the assumptions of perfect competition are often violated firms are monopolistic information is incomplete and externalities exist economists have argued for the modification of institutions so that economic reality will conform more closely to the assumptions of the model that yields such gratifying results but microeconomic theory has always maintained that allocative efficiency is in itself insufficient to maximize social welfare bator 1957 a social welfare function is required to discriminate a social optimum among the array of efficient allocations that correspond to alternative assignments of property rights though economists have posited alternative functional forms for the sake of pursuing conceptual arguments welfare functions have remained elusive constructs for well known theoretical and practical reasons consequently a sharp line of demarcation has been drawn between questions of efficiency the province of economics and equity the principal focus of ethical and political discourse in resource economics however the line demarcating efficiency and equity is often crossed the term optimal depletion appears regularly where only efficient depletion is meant while political debates about resource exploitation over time are laden with questions of the proper distribution of our natural patrimony between generations resource economists have predominantly espoused particular use rules that guarantee efficiency but overlook potential improvements in social welfare achievable through the reassignment of property rights across generations we document the evolution and current status of the misuse of the term optimal depletion in section ii we develop a simple two generation three period general equilibrium model in section iii to illustrate how alternative distributions of resource rights between generations relate to alternative pareto efficient solutions in section iv we demonstrate how different social welfare functions affect the optimal solution and associated assignment of resource rights between generations

self confidence and personal motivation the maintenance and enhancement of self esteem has always been identified as a fundamental human impulse philosophers writers educators and of course psychologists have all emphasized the crucial role played by self image in motivation affect and social interactions the aim of this chapter is to bring these concerns into the realm of economic analysis and show that this has important implications for how agents process information and make decisions conversely the tools of economic modelling can help shed light on a number of apparently irrational behaviours documented by psychologists

excessive environmental risks an intergenerational market failure abstract this paper cautions against the belief that markets work efficiently in transmitting across generations the right signals for investment decisions under risk overlapping generation models are used to show that the incompleteness of intergenerational insurance markets constitutes a market failure that leads to inefficient intergenerational investment decisions under risk early generations over diversify if they face risks that are larger than those of the following generation and could therefore be shared with them on the other hand if risks are increasing from generation to generation the current generation would under insure against those risks since the direction of the inefficiency depends on the nature of the risk assumed the policy implications depend on the empirical assessment of the risks that current and future generations are facing this paper provides applications of the general result to environmental problems such as inefficiently low protection against global warming the excessive reduction of biodiversity and inefficient depletion of a natural resource

sustainable forestry timber bequests future generations and optimal tax policy this paper analyzes harvesting and timber bequest behavior in a two period overlapping generations model where the government uses site productivity yield and inheritance taxation the ceteris paribus effects of forest and inheritance taxes are derived first then the paper discusses the optimal design of forest and inheritance taxes by assuming that intergenerational externalities are either absent or operative in the absence of intergenerational externalities it is optimal to use only the site productivity tax and not to introduce yield and inheritance taxes at all in the presence of intergenerational externalities the situation changes the paper demonstrates that the externality can be internalized by introducing either a yield tax or an inheritance subsidy or both if the government is able to use both at the same time it is desirable to use the yield tax to punish excessive harvesting and an inheritance subsidy to bribe to give bequests