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Intertemporal equilibrium with a resource bequest motive

Author

Listed:
  • BRECHET, Thierry
  • LAMBRECHT, Stéphane
Abstract
In this paper we question the role of a joy-of-giving bequest motive of a privately-owned renewable resource for sustainability. We model an overlapping generations economy in which individuals are endowed with a renewable resource. This resource can be exploited at no cost by the young households and provided to production or bequeathed to the next generation. We highlight two main results. First, the mere existence of a bequest motive does not guarantee a sustainable outcome. Second, when the resource is preserved in equilibrium, its level does not necessarily coincide with the efficient one. Whether the resource stock is too high or too low the capital stock should be lower than the golden rule level.

Suggested Citation

  • BRECHET, Thierry & LAMBRECHT, Stéphane, 2006. "Intertemporal equilibrium with a resource bequest motive," LIDAM Discussion Papers CORE 2006022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2006022
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2006.html
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    References listed on IDEAS

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    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Geir Asheim & Wolfgang Buchholz & Cees Withagen, 2003. "The Hartwick Rule: Myths and Facts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 129-150, June.
    3. Pierre‐Andre Jouvet & Philippe Michel & Jean‐Pierre Vidal, 2000. "Intergenerational Altruism and the Environment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 135-150, March.
    4. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    5. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    6. repec:bla:scandj:v:102:y:2000:i:1:p:135-50 is not listed on IDEAS
    7. Hultkrantz, Lars, 1992. "Forestry and the bequest motive," Journal of Environmental Economics and Management, Elsevier, vol. 22(2), pages 164-177, March.
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    Cited by:

    1. BALESTRA, Carlotta & BRECHET, Thierry & LAMBRECHT, Stéphane, 2010. "Property rights with biological spillovers: when Hardin meets Meade," LIDAM Discussion Papers CORE 2010071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Thierry Brechet & Stephane Lambrecht, 2009. "Family Altruism with Renewable Resource and Population Growth," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 60-78.

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    More about this item

    Keywords

    overlapping generations; joy-of-giving; natural resource; sustainability;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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