Skip navigation
Skip navigation

Exact measures of income in a hyperbolic economy

CollectionsANU Fenner School of Environment & Society
Title: Exact measures of income in a hyperbolic economy
Author(s): Pezzey, John C. V
Keywords: measures
income
hyperbolic economy
sustainability accounting
Solow
Publisher: Canberra, ACT: Centre for Resource and Environmental Studies, The Australian National University
Description: 
Exact optimal paths are calculated for a closed economy with human made capital, non-renewable resource depletion and exogenous technical progress in production, hyperbolic utility discounting, and (possibly) hyperbolic technical progress. On its optimal path, generally, welfare-equivalent income > wealth equivalent income > Sefton-Weale income > NNP, with possibly dramatic differences among these measures; and sustainable income can be greater, equal or less than NNP. This supports the view that there can be no best, exact definition of income. For low enough discounting, growth is optimal even when technical progress is zero. A particular discount rate makes all income measures and consumption constant and (except NNP) equal; and zero technical progress then gives the Solow (1974) maxim in as a special case. General problems with calculating sustainable income when there is technical progress are discussed, and the optimal path is time-consistent if the discount rate can depend on the economy’s stocks and absolute time.
URI: http://hdl.handle.net/1885/40633

Download

File Description SizeFormat Image
een0203.pdf390.12 kBAdobe PDFThumbnail


Items in Open Research are protected by copyright, with all rights reserved, unless otherwise indicated.

Updated:  27 November 2018/ Responsible Officer:  University Librarian/ Page Contact:  Library Systems & Web Coordinator