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Intergenerational Altruism and the Environment
Author(s) -
Jouvet PierreAndre,
Michel Philippe,
Vidal JeanPierre
Publication year - 2000
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00188
Subject(s) - altruism (biology) , economics , externality , microeconomics , consumption (sociology) , offspring , overlapping generations model , biology , social psychology , psychology , sociology , pregnancy , social science , genetics
We construct an overlapping generations model of pollution externality in which individuals are altruistically linked to their offspring as in Barro (1974). It is shown that steady‐state consumption may be a decreasing function of the intergenerational degree of altruism. Despite individuals' altruism, the competitive equilibrium is not optimal. We thus study the social optimum and show that it can be decentralized. JEL classification: D 62; D 64; D 91