Intergenerational Equity in a Model of Endogenous Growth
The main difficulties in trying to derive and apply social welfare criteria, such as utilitarianism or maximin, to the problem of intergenerational justice come from time-irreversibility. Future generations cannot compensate for a sacrifice made by earlier ones, or ask for just sharing of past resources that were wasted. There is a possible altruistic approach to intergenerational equity. However, it requires that the altruism of future generations be secured. In any case, intergenerational equity is not only a matter of gifts from present to future generations. It is also an issue of ‘retro-gifts’ which have to be socially contracted. In economic terms, this is translated into the problem of finding a just rate of savings, taking into account both the well-being of the present generation and the productivity of capital for future generations and considering the impossibility of ex post transfers from future generations to present ones.
Unable to display preview. Download preview PDF.
- Allais, M. (1947) Economic et Intérêt, Paris: Imprimerie Nationale.Google Scholar
- Diamond, P. A. (1965) ‘National Debt in a Neoclassical Model’, American Economic Review, vol. 55, pp. 1126–50.Google Scholar
- Kolm, S. C. (1971) Justice et Équité, Paris: CEPREMAP. Reprinted Paris: CNRS, 1972. Translated as Justice and Equity, Cambridge, Mass: MIT Press, 1998.Google Scholar
- Michel, P. (1991) ‘Economic Growth from a Normative Point of View: Historical Background and New Considerations’, Working paper. No. 91A13, GREQE.Google Scholar
- Phelps, E. S. (1961) ‘The Golden-Rule of Accumulation: A Fable for Growth Men’, American Economic Review, vol. 51, pp. 638–43.Google Scholar
- Rawls, J. (1971) A Theory of Justice, Cambridge, Mass: Harvard University Press.Google Scholar
- Romer, P. M. (1989) ‘Capital Accumulation in the Theory of Long-Run Growth’, in R. J. Barrow, (ed.), Modern Business Cycle Theory, Oxford: Basil Blackwell.Google Scholar
- Solow, R. M. (1974) ‘Intergenerational Equity and Exhaustible Resources’, Review of Economic Studies, Symposium, pp. 29–45.Google Scholar