Sustainability is compatible with decreasing social welfare
(2013) Economic Bulletin — Vol. 2, n° 1, p. 1116-1125 (2013)
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- This note studies the determination of optimal path - i.e. maximizing the intertemporal social welfare - under a sustainability constraint defined as a non-decreasing intertemporal social welfare accross time. We show that this definition suffers from an important drawback : the path obtained is not Pareto optimal. It is a drawback because nothing in our intuition of sustainable allocation justifies to give up a Pareto improvement. This implies also the possibility of false-negative result in the empirical studies aiming to determine if a country is on a sustainable path.
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Isaac, T. (2013). Sustainability is compatible with decreasing social welfare. Economic Bulletin, 2(1), 1116-1125. https://hdl.handle.net/2078.5/91888 (Original work published 2013)