Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/43840 
Year of Publication: 
2005
Series/Report no.: 
Working Papers No. 371
Publisher: 
Bielefeld University, Institute of Mathematical Economics (IMW), Bielefeld
Abstract: 
In this article we extend the recent literature on overlapping generations with a pollution sector by allowing generations to have a certain pollution perception with regards to the stock of pollution. Pollution perception, assumed to be part of the generations' preferences, can be either a concern for the flow of pollution only, or for the stock, or anything in between. We analyse the different steady states for their implications on intergenerational equity. Our main result is that if generations are only partly concerned with the actual stock of pollution, then periodic cycling will occur. We use the concept of Intergenerational Moral Intuition to analyse this periodic cycling. Our main policy conclusion is that decision makers who would like to achieve intergenerational equitable outcomes must either use the maximin criterion or take decisions spanning several generations in order to avoid the period cycling effect.
Subjects: 
Intergenerational equity
Overlapping generations
Flip bifurcation
Welfare analysis
Pollution
JEL: 
Q20
I31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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