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Population, Productivity, and Sustainable Consumption

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  • Robert S. Pindyck

Abstract

How does sustainable consumption depend on productivity growth, the size and growth rate of the population, and uncertainty over these growth rates? I address these questions using a model in which productivity and population growth are stochastic and human lives can have (positive or negative) intrinsic social value. I show how sustainable consumption depends on expected rates of productivity and population growth, the volatility of those rates, and the dependence of welfare on population. For plausible parameter values, sustainable consumption is well below the optimal welfare-maximizing level. This raises a question: given its cost, should sustainability be a social objective?

Suggested Citation

  • Robert S. Pindyck, 2024. "Population, Productivity, and Sustainable Consumption," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(4), pages 218-238, October.
    • Handle: RePEc:aea:aejmac:v:16:y:2024:i:4:p:218-38
    DOI: 10.1257/mac.20220278
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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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