Intergenerational equity and the investing of rents from exhaustible resources

Journal Article · Thu Dec 01 04:00:00 EST 1977 · Am. Econ. Rev.; (United States)

OSTI ID:5249208

Hartwick, J M

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.

• Research Organization: Queen's Univ., Belfast
• OSTI ID: 5249208
• Journal Information: Am. Econ. Rev.; (United States), Journal Name: Am. Econ. Rev.; (United States) Vol. 67:5; ISSN AERNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290400* -- Energy Planning & Policy-- Energy Resources
BEHAVIOR
CAPITAL
CONSUMPTION RATES
ECONOMETRICS
ECONOMIC IMPACT
ECONOMICS
ENERGY SOURCES
FORECASTING
HUMAN POPULATIONS
INCOME
INVESTMENT
MINERAL RESOURCES
POPULATIONS
RESOURCE ASSESSMENT
RESOURCE DEPLETION
RESOURCES
SOCIAL IMPACT
SOCIO-ECONOMIC FACTORS