Population, Productivity, and Sustainable Consumption

27 Pages Posted: 9 May 2022 Last revised: 14 May 2022

See all articles by Robert S. Pindyck

Robert S. Pindyck

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Date Written: May 2022

Abstract

How does the sustainable level of consumption depend on productivity growth and the size and growth rate of the population? What is the effect of uncertainty over these growth rates? I address these questions using a model in which productivity and population growth are stochastic, and social welfare allows for human lives to have (positive or negative) intrinsic value. I show how the maximum sustainable consumption-wealth ratio depends on expected rates of productivity and population growth, the volatility of those growth rates, and the extent to which welfare depends directly on the size of the population. For plausible parameter values, the sustainable consumption-wealth ratio is well below the optimal ratio that maximizes welfare. This raises a question: Given its cost, should sustainability be a social objective?

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Pindyck, Robert S., Population, Productivity, and Sustainable Consumption (May 2022). NBER Working Paper No. w30019, Available at SSRN: https://ssrn.com/abstract=4104005

Robert S. Pindyck (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
Cambridge, MA 02139
United States
617-253-6641 (Phone)
617-258-6855 (Fax)

HOME PAGE: http://web.mit.edu/rpindyck/www/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
4
Abstract Views
64
PlumX Metrics