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To seed, or not to seed? An endogenous labor supply approach in a simple overlapping generation economy

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  • David Desmarchelier
  • Alexandre Mayol

Abstract

Within this paper, we develop a simple overlapping generations model with a renewable resource (forest) in the spirit of Koskela et al. (2002). Seeding activities (more broadly, forestry) are introduced in the form of a domestic production as well as a joy‐of‐giving bequest motive regarding the resource. In this simple framework, we show that altruism always guarantee a positive resource level at the steady state. However, studying the dynamics, we point out that the stability of the steady state crucially depends upon both altruism and forestry productivity: under low forestry productivity the steady state is always stable, while under high forestry productivity two period cycles (flip bifurcation) can emerge near the steady state if and only if altruism is sufficiently high which raises the question of resource preservation and leads to the conclusion that the road to hell is paved with good intentions.

Suggested Citation

  • David Desmarchelier & Alexandre Mayol, 2022. "To seed, or not to seed? An endogenous labor supply approach in a simple overlapping generation economy," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 25-38, January.
  • Handle: RePEc:bla:buecrs:v:74:y:2022:i:1:p:25-38
    DOI: 10.1111/boer.12282
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    1. Gregory Amacher & Markku Ollikainen & Mikko Puhakka, 2018. "Renewable Resource Use and Nonseparable Amenity Benefits," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 637-659, April.
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    3. Fabbri, Giorgio & Faggian, Silvia & Freni, Giuseppe, 2015. "On the Mitra–Wan forest management problem in continuous time," Journal of Economic Theory, Elsevier, vol. 157(C), pages 1001-1040.
    4. Bréchet, Thierry & Lambrecht, Stéphane, 2011. "Renewable resource and capital with a joy-of-giving resource bequest motive," Resource and Energy Economics, Elsevier, vol. 33(4), pages 981-994.
    5. Koskela, Erkki & Ollikainen, Markku & Puhakka, Mikko, 2002. "Renewable Resources in an Overlapping Generations Economy Without Capital," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 497-517, May.
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    11. Ali Khan, M. & Piazza, Adriana, 2012. "On the Mitra–Wan forestry model: A unified analysis," Journal of Economic Theory, Elsevier, vol. 147(1), pages 230-260.
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    Cited by:

    1. David DESMARCHELIER & Rémi GIRARD, 2022. "Renewable resource and harvesting cost in a simple monetary overlapping generation economy," Working Papers of BETA 2022-32, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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