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To seed, or not to seed

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  • David DESMARCHELIER
  • Alexandre MAYOL

Abstract

Within this paper, we develop a simple overlapping generations model (OLG) 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 crucial depends upon both altruism and forestry productivity: under a low forestry productivity, the steady state is always stable while, under a high forestry productivity, two period-cycles (flip bifurcation) can emerge near the steady state if and only if altruism is sufficiently high which rises 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, 2020. "To seed, or not to seed," Working Papers of BETA 2020-04, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2020-04
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    File URL: http://beta.u-strasbg.fr/WP/2020/2020-04.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Renewable resource; OLG model; altruism; flip bifurcation.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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