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Schneider, Maik T.
- Working Paper
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Rights / licenseIn Copyright - Non-Commercial Use Permitted
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 Show more
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Journal / seriesEconomics Working Paper Series
PublisherETH, Swiss Federal Institute of Technology, CER-ETH - Center of Economic Research at ETH Zurich
SubjectOverlapping generations; Intergenerational equity; Discounting; Time preference; EXTERNE EFFEKTE; BARWERT + DISKONTIERUNG (FINANZMATHEMATIK); Climate change; GROWTH MODELS (ECONOMICS); WACHSTUMSMODELLE (WIRTSCHAFTSWISSENSCHAFTEN); GLOBAL CHANGE + GLOBAL WARMING (CLIMATOLOGY); WOHLFAHRTSÖKONOMIK; GLOBAL CHANGE + KLIMAERWÄRMUNG (KLIMATOLOGIE); PRESENT VALUE + DISCOUNTING (FINANCIAL MATHEMATICS); Iinfinitely-lived agents; WELFARE ECONOMICS; EXTERNALITIES
Organisational unit02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
03729 - Gersbach, Hans / Gersbach, Hans
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