Characterizing sustainability : the converse of Hartwick's rule

C.A.A.M. Withagen, G.B. Asheim

Research output: Contribution to journalArticleAcademicpeer-review

40 Citations (Scopus)

Abstract

This note offers a general proof of the converse of Hartwick's rule, namely that – in an economy with stationary instantaneous preferences and a stationary technology – an efficient constant utility path is characterized by the value of net investments being zero at each point in time. In a one consumption economy with two stocks – a stock of a natural resource and a stock of man-made capital – this means that if consumption remains constant at the maximum sustainable level, then the accumulation of man-made capital always exactly compensates in value for the depletion of the natural resource.
Original languageEnglish
Pages (from-to)159-165
Number of pages7
JournalJournal of Economic Dynamics and Control
Volume23
Issue number1
DOIs
Publication statusPublished - 1998

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