Econometrica: Jul 1980, Volume 48, Issue 5
Equity Among Generations
Lars-Gunnar SvenssonNormally the objective functions used in optimal growth theory either treat present generations more favorable than future ones or give an incomplete ranking of possible welfare distributions. The problem is the infinite horizon. In this paper we analyze the conditions under which it is possible to treat a countably infinite number of generations equally. The existence of equitable objective functions or preferences, giving a complete ranking of possible welfare distributions, is proved.
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