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Equity Between Overlapping Generations

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  • JOHN QUIGGIN

Abstract

This note is a demonstration that, in the presence of overlapping generations and under standard conditions for a social welfare ordering (Pareto optimality, transitivity, independence), the only ordering consistent with utilitarianism for all people currently alive at any given point in time is one based on weighting all people equally, regardless of their date of birth. In particular, this implies that, under reasonable conditions, the appropriate choice for the pure rate of social time preference is equal to zero.
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  • John Quiggin, 2012. "Equity Between Overlapping Generations," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(2), pages 273-283, March.
    • Handle: RePEc:bla:jpbect:v:14:y:2012:i:2:p:273-283
    DOI: j.1467-9779.2011.01540.x
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    References listed on IDEAS

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    1. Mehra, Rajnish & Prescott, Edward C., 1985. "The equity premium: A puzzle," Journal of Monetary Economics, Elsevier, vol. 15(2), pages 145-161, March.
    2. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801.
    3. William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
    4. Schelling, Thomas C, 1995. "Intergenerational discounting," Energy Policy, Elsevier, vol. 23(4-5), pages 395-401.
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    2. Maya Eden, 2023. "The Cross‐Sectional Implications of the Social Discount Rate," Econometrica, Econometric Society, vol. 91(6), pages 2065-2088, November.
    3. Nicholas Stern, 2013. "Ethics, equity and the economics of climate change. Paper 2: Economics and Politics," GRI Working Papers 84b, Grantham Research Institute on Climate Change and the Environment.
    4. John Quiggin, 2012. "Stabilizing the Global Climate: A Simple and Robust Benefit-Cost Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 291-300.
    5. Tanguy Isaac & Paolo Piacquadio, 2015. "Equity and efficiency in an overlapping generation model," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 549-565, March.
    6. Stern, Nicholas, 2014. "Ethics, equity and the economics of climate change paper 2: economics and politics," LSE Research Online Documents on Economics 62704, London School of Economics and Political Science, LSE Library.
    7. Lugovoy, O. & Polbin, A., 2016. "On Intergenerational Distribution of the Burden of Greenhouse Gas Emissions," Journal of the New Economic Association, New Economic Association, vol. 31(3), pages 12-39.

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    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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