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Intergenerational transfers, lifetime welfare and resource preservation

Intergenerational transfers, lifetime welfare and resource preservation

Authors :
Valente, Simone
Source :
Economics Working Paper Series, 06 (55)
Publication Year :
2006
Publisher :
ETH Zurich, 2006.

Abstract

This paper analyzes overlapping-generations models where natural capital is owned by sel sh agents. Transfers in favor of young agents reduce the rate of depletion and increase output growth. It is shown that intergenerational transfers may be preferred to laissez-faire by an inde nite sequence of generations: if the resource share in production is su¢ ciently high, the welfare gain induced by preservation compensates for the loss due to taxation. This conclusion is reinforced when other assets are available, e.g. man-made capital, claims on monopoly rents, and R&D investment. Transfers raise the welfare of all generations, except that of the first resource owner: if resource endowments are taxed at time zero, all successive generations support resource-saving policies for purely sel sh reasons.<br />Economics Working Paper Series, 06 (55)

Details

Language :
English
Database :
OpenAIRE
Journal :
Economics Working Paper Series, 06 (55)
Accession number :
edsair.doi.dedup.....0ed564e515a425db4c2347d257048cd2
Full Text :
https://doi.org/10.3929/ethz-a-005286662