Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Growth, Environment and Discounting Location: B128 Session Chair: Anastasios Xepapadeas, University of Bologna | |
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Procedural Intergenerational Equity and the Social Discount Factor: A Bargaining Approach Waseda University, Japan Egalitarianism and undiscounted utilitarianism have been widely studied as approaches to intergenerational equity. However, discounted utilitarianism remains central in normative macroeconomics despite longstanding concerns about its ethical justification. This paper develops a procedural foundation for the social discount factor within discounted utilitarianism. Building on Binmores (2005) social contract approach, we define a procedurally intergenerationally equitable (PIE) path as the outcome of intergenerational bargaining. We then identify the discount factor under which a Ramsey model replicates this path and interpret it as an intergenerationally justifiable (IJ) discount factor. Using tractable dynamic models, we show that the IJ discount factor is closely linked to the economic environment. In a benchmark case, the corresponding discount rate coincides with the output elasticity of capital. We further examine a non overlapping-generations model with intergenerational altruism and an overlapping-generations model with individual time preferences, and characterize how these factors affect the IJ discount factor. | |