Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76765
Authors: 
Schneider, Maik T.
Traeger, Christian
Winkler, Ralph
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers, Department of Economics, Universität Bern 10-07
Abstract: 
The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify three shortcomings of the latter: First, underlying normative assumptions about social preferences cannot be deduced unambiguously. Second, the distribution among generations living at the same time cannot be captured. Third, the optimal solution may not be implementable in overlapping generations market economies. Regarding the recent debate on climate change, we conclude that it is indispensable to explicitly consider the generations' life cycles.
Subjects: 
climate change
discounting
infinitely-lived agents
intergenerational equity
overlapping generations
time preference
JEL: 
D63
H23
Q54
Document Type: 
Working Paper

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