TY  - JOUR
AU  - Beltratti,Andrea
AU  - Chichilnisky,Graciela
AU  - Heal,Geoffrey
TI  - Sustainable Growth and the Green Golden Rule
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4430
PY  - 1993
Y2  - August 1993
UR  - http://www.nber.org/papers/w4430
L1  - http://www.nber.org/papers/w4430.pdf
N1  - Author contact info:
Andrea Beltratti
Department of Finance
Bocconi University
Via Roentgen 1
20100 Milan
Italy
E-Mail: andrea.beltratti@intesasanpaolo.com

Graciela Chichilnisky
335  riverside drive ny ny 10025
E-Mail: gc9@columbia.edu

Geoffrey Heal
Graduate School of Business
616 Uris Hall
Columbia University
New York, NY 10027-6902
Tel: 212/854-6459
Fax: 212/316-9219
E-Mail: gmh1@columbia.edu
AB  - We study a growth model with an environmental asset which is a source of utility and an input to consumption and production. The stock of this asset follows its own ecological dynamics, which are affected by economic activity. We study the implications of an approach to ranking sequences of consumption and environment over time that place weight both on the characteristics of the sequence over any finite period and on its very long run or limiting characteristics. Chichilnisky [5] has called these "sustainable preferences". The criterion shows more intertemporal symmetry than the discounted utilitarian approach. which clearly emphasizes the immediate future at the expense of the long run. In this respect Chichilniskys criterion captures some of the concerns of those who argue for sustainability and for a heightened sense of responsibility to the future. To characterize optimal paths we define the "green golden rule", the path which maximizes long-run sustainable utility from consumption and environment.
ER  -